Emirates Airline on track for $2 billion annual profit

Dubai’s critics will be having indigestion at breakfast this morning as they wake up to the news that Emirates Airline posted a profit just shy of $1 billion for the first half of its financial year which runs from end of March through September.

This represented a more than quadrupling of profit in the first half and puts the airline on course for a $2 billion profit in the present financial year, unless higher fuel prices intervene or the world goes back into recession. Emirates carried 15.5 million passengers in the six month period, another record, and achieved a remarkable 81.2 per cent load factor.

Business back

Chairman Sheikh Ahmed bin Saeed Al Maktoum said the airline benefited from the return of business and first-class travelers, and from a strategy of deploying new aircraft to routes serving the faster growing world economies.

‘Flexibility affords us the option of increasing passenger and cargo services on high-demand sectors,’ he said ‘By following these positive spikes in regional economies we have been able to maximise the use of our fleet to further stimulate revenue.’

It is incredible to think that less than a year ago the global newspaper headlines had Dubai as dead in the water. Last month the government returned to the international bond market raising $1.25 billion.

Cash flow

Now the airline turns in a profit that would allow it to pay off the IMF estimated Dubai debt of $109 billion in just over 50 years. This is not a flippant point. Dubai has many cash generating businesses that are government owned. It is not unable to service its debt, and that is why Dubai can borrow again.

Emirates has a super-modern fleet of 150 wide-bodied aircraft that serve over 100 destinations, and recently ordered another 32 A380 super jumbos. The airline is the world’s biggest operator of this liner of the sky which is also the world’s most profitable aircraft if filled with high paying passengers.