A combination of geopolitical and macroeconomic factors brought about a sharp reduction in earnings at Emirates in the 2016-17 financial year, the Dubai-based airline reported on Thursday.
Net profit dropped 82.5% compared to 2015-16, at AED1.25 billion ($340 million) compared to net profit of AED7.13 billion ($1.94 billion) last year. Revenue for the period was static at AED85 billion ($23.1 billion), ATW Online reported.
Emirates Group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum said the aviation and travel markets were notoriously vulnerable to social, economic and political events, and “for us, this year has been a particularly testing one”.
He cited a combination of global terrorist attacks, the attempted coup in Turkey, the UK’s vote to leave the European Union and the election of US President Donald Trump.
Maktoum said the last of these factors, in particular, had affected Emirates, noting that the new US administration “in its first three months issued a raft of new measures relating to entry requirements, enhanced security vetting procedures and restrictions on personal electronic devices in aircraft cabins … These all directly impacted Emirates’ operations into the US.”
The airline’s figures for 2016-17 show that an 8.1% rise in the number of passengers carried, which reached 56.1 million, did not keep pace with a 10.3% increase in capacity, measured in ASKs, which rose to 368 billion. Load factor dropped 1.4 points to 75.1%.
Cargo carried increased 2.7% to 2.58 million tons.
Over the year, Emirates added 35 aircraft to its fleet while retiring 27, the largest fleet roll-over program in the carrier’s history and one that brought its average fleet age down to 63 months, compared with 74 months last year. The industry average is 140 months.
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