Emirates posts more than 400% surge in profits

Emirates, debt-laden Dubai's flag carrier, yesterday posted a whopping 416-per cent surge in net profit last year, reaching $964 million and bucking the global trend in the airline industry.

"It has been an exceptional year of continued profitability against a backdrop of the worst global recession in generations," Emirates chief executive officer Sheikh Ahmed bin Saeed al-Maktoum said.

Emirates Airlines' profits in the year ending March 31, 2010 was 416 per cent up from the $187 million posted for the previous 12-month period, the company said.

The net profits of the parent firm, Emirates Group, hit $1.1 billion, up 248 per cent from $325 million in the previous year, with total revenues slightly increasing to $12.4 billion from $12.3 billion.

The carrier said it transported 27.5 million passengers last year, more than 20 per cent up from 22.7 million passengers the year before.

"The increase in passenger numbers is attributable not only to our position at the centre of the new Silk Road between East and West but also to our commitment to increasing our network and service standards," Sheikh Ahmed said in a statement released at a news conference to announce the results.

He said the company faced the same challenges as other carriers affected by the global financial crisis and the slowdown in global travel, but Emirates had benefited from the good performance of the Middle East region.

"We are fortunate to be operating in the Middle East" he said, where passenger growth was at 8.5 per cent in 2009, according to the International Air Transport Association (IATA).

The carrier's net profit plunged in the year ending March 31, 2009 to $187 billion, due to high oil prices and tumbling demand for air travel amid the global economic downturn.

The cash balance of the group grew to 12.5 billion dirhams ($3.4 billion) at the end of March, up 43.3 per cent from the previous year, and after spending 4.3 billion dirhams ($931 million) of investments, mainly on purchasing new aircraft.

"Our cash position is excellent," Sheikh Ahmed said, maintaining that banks were "queueing" to provide finance for the purchase of eight new aircraft scheduled to be delivered this year.

He noted, however, that the company has resorted to freezing recruitment while some staff had to take unpaid leave as part of cost containment.

The CEO also insisted in the statement that Emirates was not subsidised by the government, which is currently facing a mountain of debt after the global crisis thwarted its rapid economic growth.