Emirates airline profit rebounds on cost savings

Leading Middle East airline Emirates said Thursday its half year net profit rebounded strongly from a slump last year due to cost saving measures and favorable exchange rates. The Dubai flag carrier said it posted a net profit of $452 million in the period from April to September, up 111 percent on the same period last year.

That was more than the $340 million net income for the whole of the last fiscal year to March 31. The rise in earnings was driven by “capacity optimization and efficiency initiatives across the company, steady business growth, and a more favorable foreign exchange situation compared to the same period last year,” the airline said.

Emirates, which operates a fleet of 264 aircraft, had blamed fierce competition, currency devaluations and US travel restrictions for the 82.5 plunge in its profit in the previous fiscal year.

“The easing of the strong US dollar against other major currencies helped our profitability. We are also seeing the benefit from various initiatives across the company to enhance our capability and efficiency with new technologies and new ways of working,” said chairman and CEO Sheikh Ahmed bin Saeed al-Maktoum.

“Moving forward, we will continue to keep a careful eye on costs while investing to grow our business and provide our customers with world-class products and services,” he said. The rise in profit was helped by reducing its workforce by 3,000 employees to 102,670 during the period due to “natural attrition and slower pace of recruitment.”

Sheikh Ahmed said the boost in profit was achieved despite key challenges. “Our margins continue to face strong downward pressure from increased competition, oil prices have risen, and we still face weak economic and uncertain political realities in many parts of the world,” he said.

Emirates, which has just welcomed the 100th Airbus A380 superjumbo jet to be the world’s biggest customer of the plane, said half-year revenues were up six percent to $12.1 billion. In the six-month period, the company carried 29.2 million passengers, up four percent on last year. The airline has received 10 new wide-body aircraft in the period four Airbus A380s and six Boeing 777s and is scheduled to receive nine more by March next year, it said.

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