UAE. Emirates Airline has announced a record performance for the first six months of its financial year, ending 30 September 2007, with net profits of AED2.36 billion (US$643 million) up +99% year-on-year.
The remarkable results were driven by higher passenger demand combined with higher yields. Net margin was 13.7% compared to 8.7% for the corresponding period last year.
Emirates Chairman and Chief Executive H.H. Sheikh Ahmed bin Saeed Al-Maktoum said: “Emirates has delivered another excellent performance which reflects healthy demand for our products and services. We have expanded our route network with new large capacity, fuel-efficient aircraft, and have continued to invest in a high quality product for our customers. These investments, matched with robust global demand for air travel, are paying off.
“Looking at the next six months, fuel costs remain a serious challenge for us with the price of crude oil now heading towards US$100 per barrel“ |
H.H. SHEIKH AHMED BIN SAEED AL-MAKTOUM, CHAIRMAN, EMIRATES |
“Looking at the next six months, fuel costs remain a serious challenge for us with the price of crude oil now heading towards US$100 per barrel. There is also continued uncertainty surrounding the impact of recent credit issues in the financial markets on passenger demand. However, I remain confident that Emirates is well positioned to address these challenges and continue our profitable growth.”
Emirates’ operating revenue at AED16.96 billion (US$4.62 billion), was up +25.8% compared to AED13.48 billion (US$3.67 billion) during the corresponding period last year.
Passenger revenue rose +30.5% to AED13.1 billion (US$3.56 billion), with passenger numbers up by 1.9 million or +23% to 10.3 million. Seat factor improved to 79.7% for the period, on +17% higher seat capacity in terms of available seat kilometers.
Fuel costs for the first six months remained the top expenditure item accounting for 27.8% of total operating costs.
The airline has one of the industry’s most dynamic inflight retail operations, headed by Vice-President Duty Free Services John Sime. Business has been outstanding this year, he told The Moodie Report today. “Last month (October) we had a record month, with sales of AED11.4 million (US$3.1 million),” he said. “That’s up +72% on the same month last year.”
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Emirates Vice-President Duty Free Services John Sime (pictured with the Frontier Award from 2006): “Last month we had a record month, with sales of AED11.4 million (US$3.1 million) – that’s up +72% on the same month last year” |
Sime said year-to-date sales are currently running at +49% ahead of 2006. “Our spend per head has increased by +25% this year,” he added, noting the impact of the new brochure, a revamped assortment and additional routes and passenger profiles.
“For example, we have opened up the Lagos [Nigeria] route and it is now our number one route,” he said. “Sales are 85% cash and are spread right across the board – from high-end luxury to cheaper items.”
Sime also acknowledged the contribution of his team and cabin crew. He is running a crew incentive from October to December inclusive that allows a cabin crew member excelling in duty free to win a Mini-Cooper car. Pursers, influential in maximising the sales opportunity, are also being offered the chance to win short holiday breaks.
Since April 2007, Emirates has launched passenger services to five new destinations -Venice, Newcastle, Sao Paulo, Toronto and Ahmedabad, bringing its global network to 97 cities on six continents. The airline will commence operations to Houston, US from 3 December.
In addition to new destinations, Emirates has also increased the frequency of passenger services and added capacity with larger aircraft to many of its existing destinations during the half year.
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