Emirates airline, the world’s biggest operator of wide-body aircraft, reported a 124 per cent rise in profit for its last fiscal year on the back of higher revenues and a decline in the US dollar against major currencies in most of its key markets.
The world's biggest long-haul airline on Wednesday said net profit rose to Dh2.8 billion in its fiscal year ending March 31, 2018, while the parent company Emirates Group, which also includes its Dnata ground-handling operations and cargo, posted a 67 per cent rise in profit to Dh4.1bn in the same period.
“Business conditions in 2017-18, while improved, remained tough,” said Sheikh Ahmed bin Saeed, chairman of Emirates. “We saw ongoing political instability, currency volatility and devaluations in Africa, rising oil prices which drove our costs up, and downward pressure on margins from relentless competition...on the positive side, we benefited from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar.”
Emirates carried 4 per cent more passengers, serving a record 58.5 million people. It reported a 77.5 per cent seat load factor in the period compared to 75.1 per cent previously. The airline's revenue increased 9 per cent to Dh92.3bn, supported by strong cargo performance, while group revenue climbed 8 per cent to Dh102.4bn over last year’s results. Total passenger and cargo capacity crossed 61 billion available tonne kilometres (ATKM) in the last fiscal year.
An expanded codeshare agreement with low-cost sister flydubai benefited the airline as will closer collaboration in the future with Abu Dhabi’s Etihad Airways – in catering, ground-handling and lounge facility sharing, Sheikh Ahmed told reporters.
“The relationship with Etihad is going in the right direction, and my view is we can continue this,” he said.
In line with profit growth, the group declared a dividend of Dh2bn to majority shareholder the Investment Corporation of Dubai. The strong results come after Emirates saw profits plunge 82 per cent in the 2016-17 fiscal year. Like other Middle Eastern carriers, Emirates was hit hard by tough operating conditions at the start of 2017, including travel restrictions on US routes, a ban on large electronic devices in cabins and currency fluctuations.
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Read more:
Sheikh Ahmed: Emirates set for stronger annual earnings
Emirates Group net profit soars 77% in first half to Dh2.3 billion
Emirates-Flydubai codeshare deepens choice for customers, boosts carrier gains
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“Emirates' business environment has markedly improved over the last financial year,” said Diogenis Papiomytis, director of commercial aviation at management consultancy Frost & Sullivan. “The US presidency has not been as disruptive to Gulf carriers’ US operations as previously expected, while socio-political destabilising events have reduced in their number and impact.”
Global airline yields are projected to bounce back after five years of consecutive declines, according to the International Air Transport Association.
Emirates has implemented several measures to boost revenues in the last fiscal year, including charging for advance seat selection and reducing its payroll by 3 per cent from the previous year.
“The recovery was fast because the reaction was fast,” said Andrew Charlton, managing director of consultancy Aviation Advocacy. “They did the right things – trimmed capacity, trimmed costs and looked at their operations through gimlet eyes. The plan to refresh the fleet will save fuel too, which is just as well as the oil price goes up past $70 [per barrel] again.”
Looking ahead Sheikh Ahmed said he expects a “good” 2018/19 and that escalating fuel costs will be the single biggest challenge for the coming year. Emirates plans to keep identifying efficiencies, he said.
The carrier’s fuel bill increased 18 per cent in the 2016/17 fiscal year and total operating costs rose by 7 per cent. Emirates is unlikely to hedge fuel because of rising oil prices, Sheikh Ahmed said.
The airline has no immediate plans to stop flights to Iran following the US decision on Tuesday to exit the Iran nuclear deal, he said.
“We continue to fly to Iran and through its airspace. The airline cannot control geopolitical issues and we will do what we always do in such situations: look at which new markets to go to.”
In February, Emirates confirmed a preliminary $16bn order from Airbus for 20 A380 aircraft and options for 16 more. The carrier is expected to exercise its A380 options “soon”, Sheikh Ahmed said.
Meanwhile, the expanded codeshare partnership between Emirates and flydubai announced last July has helped boost the bottom line as the two carriers ratchet up a bigger slice of the regional aviation market. The partnership launched codeshare routes to more than 80 destinations to date, with plans to build a joint network of 240 destinations by 2022.
Dnata's ground handling business achieved its highest profit ever reaching Dh1.3bn.
Brolliology: A History of the Umbrella in Life and Literature
By Marion Rankine
Melville House
Racecard
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
COMPANY%20PROFILE
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COMPANY%20PROFILE
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Traits of Chinese zodiac animals
Tiger:independent, successful, volatile
Rat:witty, creative, charming
Ox:diligent, perseverent, conservative
Rabbit:gracious, considerate, sensitive
Dragon:prosperous, brave, rash
Snake:calm, thoughtful, stubborn
Horse:faithful, energetic, carefree
Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
