Emirates Group records 24th successive year of profit

Emirates Group’s tour operating and airport operations arm Dnata produced its highest ever profit in 52 years of operation in 2011.

The $220 million record profit contributed to Emirates Group’s net profit of $629 million in the 2011/12 financial year in the face of “unprecedented economic pressure and record high fuel prices”.

Dnata’s revenue was up by 58.9% to $1.9 billion while operating costs also rose by 58.9% to $1.7 billion.

The results highlight that 55% of Dnata’s revenue is derived from its international operations, an increase of 17% over the previous year. This follows the acquisition of a majority stake in Travel Republic in the UK and a half share in Wings Inflight Services in South Africa.

It was the parent group’s 24th consecutive year of profit. It came as revenue reached a record high, climbing by 17.8% to $18.4 billion. Its cash balance grew by 9.5% to $4.8 billion and staff numbers rose by 10%.

Emirates’ fuel bill increased by 44.4% to reach $6.6 billion while operating costs soared by 24% compared to a revenue increase of 16.2%.

“Emirates bore the brunt of the crippling cost of fuel for nearly one year, before reluctantly introducing a fuel surcharge on all tickets,” the group’s annual report says.

Group chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said: “Achieving our 24th consecutive year of profit and maintaining an upward growth trajectory is an achievement that belies the industry norm.

“Throughout the 2011-12 financial year the group has collectively invested close to $3.8 billion in new products. This investment has garnered new customers and increased our international presence.

“Successful business growth is not a matter of luck, it is the result of sustained and calculated investment. Every dirham that we earn is strategically ploughed back into our business and it is this foresight that has allowed the group to maintain such strong and consistent profitability.”

Sheikh Ahmed added: “In the last five years, Emirates’ capacity measured in available seat kilometres, has increased by almost 100% facilitating new trade links and creating a new flow of passenger traffic.

“Being the first to capitalise on these new opportunities has allowed us to gain a distinct competitive advantage, one that we intend to maintain.”

Looking forward, he said: “We move into the new financial year with cautious optimism, navigating our way through the difficult economic climate with a clear vision for our continued success. We understand that succeeding in this industry requires determination and we are unapologetic about our drive to be the best.

“We are never complacent, always striving for perfection and always acutely aware that things can be done better.

“Customers’ expectations only get higher and it is up to us to ensure that we move upwards with them. With the help of our 63,000 strong multicultural workforce we have no doubt that the years ahead will again be more profitable than the last.”

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