Emirates Airline has posted 124% profit growth for its most recent financial year, delivering a AED2.8 billion ($762 million) profit despite “strong competitive pressure across all markets” and higher fuel prices.

For the 12 months ended March 31, passenger numbers rose 4% to 58.5 million, pushing load factor up 2.4 points to 77.5%.

“The increase in passenger seat factor compared to last year’s 75.1%, is a result of successful capacity management in response to political uncertainty and strong competition in many markets, despite a moderate 2% increase in seat capacity,” Emirates said, announcing its year-end results May 9.             

Dubai-based Emirates had to adjust fare levels because of this difficult backdrop, but revenues still grew 9% to AED92.3 billion. The airline said revenues are “well-balanced,” with none of its six regions contributing more than 30% of overall revenues.

“Europe was the highest revenue-contributing region with AED26.7 billion, up 12% from 2016-17. East Asia and Australasia follows closely with AED25.4 billion, up 12%. The Americas region recorded revenue growth at AED13.4 billion, up 7%. Gulf and Middle East revenue decreased by 2% to AED8.5 billion, whereas revenue for Africa increased by 8% to AED9.4 billion. West Asia and Indian Ocean revenue increased by 5% to AED7.8 billion,” Emirates said.

Emirates SkyCargo recorded “a strong performance in a resurgent market,” delivering 14% of the airline’s total transport revenue at AED12.4 billion, up 17% year-on-year. FTKs were up 14%, while tonnage carried increased 2% to reach 2.6 million tonnes.

Meanwhile, the airline’s operating costs rose 7%. This was driven by fuel costs going up 18%, based on fuel prices increasing 15% and the need for 3% more fuel to support capacity growth. Fuel now makes up 28% of Emirates operating costs, up from 25% in 2016-17.

“The decline of the US dollar against currencies in most of Emirates’ key markets for the first time in a number of years had an AED661 million positive impact to the airline’s bottom line,” the airline said.

Passenger and cargo capacity growth for 2017-18 was moderated to 2%, with Emirates adding just two new passenger destinationsPhnom Penh in Cambodia and Zagreb in Croatiaand increasing capacity to 15 existing destinations. The aim of this moderation was to focus on yields, which rose to 25.3 fils (6.9 US cents) per RPK.

Over the 12 months, Emirates took delivery of eight Airbus A380s and nine Boeing 777-300ERs, taking the airline to a net fleet of 268 aircraft. During the year, Emirates committed to 40 787-10s to be delivered from 2022 and 36 additional A380s, including 16 options.

For 2018-19, Emirates has announced new routes to London Stansted in the UK, Santiago in Chile, Edinburgh in Scotland, and an additional flight between Dubai and Auckland via Bali, as well as capacity upgrades to existing destinations.

At group level, Emirates posted a AED4.1 billion profit, based on record revenue of more than AED100 billion.

“Business conditions in 2017-18, while improved, remained tough. 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 benefitted from a healthy recovery in the global air cargo industry, as well as the relative strengthening of key currencies against the US dollar,” Emirates Airline and group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum said.

Victoria Moores victoria.moores@informa.com