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Emirates Group said the impact of wars, currency swings and the Ebola epidemic means the world’s No. 1 international airline must be flexible in the face of “external threats” as profit growth almost grinds to a halt.
Net income in the first half ended Sept. 30 rose 1 percent to 2.2 billion dirhams ($607 million), with earnings falling at ground-handling unit Dnata as runway repairs cut the number of planes served and a move to Dubai’s new airport increased costs. Profit at the airline unit, which stayed put, gained 8 percent.
“It is critical that we stay agile as we grow,” Chairman Sheikh Ahmed bin Saeed Al Maktoum said. “The ability to adapt and act quickly will determine our continued success.” External factors “appear to be piling up, impacting commercial aviation and travel, but show no signs of speedy resolution,” he added.
Emirates, the largest operator of Airbus Group NV A380 and Boeing Co. 777 wide-body jets, curbed flights to 41 destinations during the 80-day runway disruption, slicing 1 billion dirhams off revenue. The carrier also took early action in halting operations to Guinea in response to the deadly Ebola outbreak, and was quick to divert planes away from areas of conflict including Ukraine and Iraq, resulting in higher fuel burn.
Like Gulf rivals Qatar Airways and Etihad Airways PJSC of Abu Dhabi, Emirates serves a relatively small home population and relies on transfer passengers using its hub for travel between North America and Europe and Asia, Africa and other Mideast destinations to fill its mammoth wide-body fleet.
Dnata, which also provides in-flight catering, cargo and travel booking services, suffered a 26 percent profit drop to 339 million dirhams due to the cost of establishing handling operations at Dubai World Central, the sheikdom’s second airport and due to become its main hub over the next decade.
Group revenue gained 12 percent to 47.5 billion dirhams, spurred by an 11 percent jump to 39.8 billion dirhams at the airline arm, which remains based at Dubai International Airport.
Earnings at the carrier reached 1.9 billion dirhams as its passenger count increased 8 percent to 23.3 million in the six months. The business added 13 aircraft — six A380s and seven 777s — while maximizing capacity during the runway closures by deploying as many superjumbos as possible on remaining flights.
That helped lift its load factor, a measure of seat occupancy, by 2.3 points to 81.5 percent.
Emirates introduced four new destinations in the period, among them Chicago as the the No. 1 Gulf carrier cranks up competition with U.S. and European carriers that have dominated trans-Atlantic flying for decades. Cargo volumes at the airline increased 5.4 percent to 1.14 million metric tons.
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