Emirates Group declares 74% rise in Profits to a Billion Dirhams

The Emirates Group has declared a 74 per cent increase in net profits to Dhs 1.05 billion ($285.7 million) for the financial year 2002/3, ended on 31st March 2003, driven by the growing confidence of its customers in the airline and travel-related group of companies.

Emirates Airline’s operations alone achieved a staggering 94 per cent increase in profits, from Dhs 468.2 million ($127.6m) to Dhs 906.7 million ($247.1m).

The average passenger seat factor rose to 76. 6 per cent, breaking all previous records, and cargo represented 19.6 of the airline’s revenue.

Total Group revenue increased by 31 per cent to Dhs 10.2 billion ($2.8b) in the year ending 31st March 2003, compared with Dhs 7.8 billion ($2.1b) in the previous year. Dnata returned a net income of Dhs 141.7 million ($38.6m), up from Dhs134.8 million ($36.7m) for last year.

The cash balance for the Group stood at Dhs4.8 billion ($1.3b) at the year end, compared to Dh3.4 billion ($0.9b) at the end of the previous year.

The Report and Accounts of the Emirates Group, which comprises Emirates Airline and Dnata, were disclosed by Emirates’ Chairman, His Highness Sheikh Ahmed bin Saeed Al-Maktoum, at a press conference in its Dubai hub today.

In his Review, contained in the Report, Sheikh Ahmed said: “As I travel around our network, journalists always ask the same question - what is the secret? I am convinced the answer is our passion for quality, which surfaces throughout the Group wherever we do business.”

He added: “But I must point out that this success does not come automatically, or by chance, but is the consequence of real teamwork by our experienced and professional management and staff who have the ability to combine hard-nosed, cost-effective measures with a people-to-people personal touch.”

The growth of Emirates goes hand-in-hand with the growth of Dubai. The Group’s passion for quality is seen also in its active promotion of its home base as the 21st century’s most exciting city for commerce and tourism, with a difference. 

Sheikh Ahmed paid tribute to Dubai’s visionary government which confidently plans and builds for the future: “At the airport, too, the government is making a crucial, multi-million dollar investment in a new, revolutionary expansion of the already futuristic complex which will increase the capacity to 60 million passengers a year by 2012 - and in a mega cargo  centre capable of handling one million tonnes of freight, providing Emirates with an exclusive terminal from 2007.”

Pointing out how the Emirates Group does its part, he said that in addition to the benefit to the community of air services and long-term, unsubsidised  profitability, the Emirates Group contributes significantly to the Dubai Gross Domestic Product.

“In the financial year under review, the contribution of the Group to the Dubai economy was Dhs4.0 billion ($1.1b) in direct expenditure, plus a conservative estimate of an additional Dhs6.1 billion ($1.65b) in related expenditure by third parties - a total of Dhs10.1 billion ($2.75bn),” he added.

The last year was a difficult one for the aviation industry which suffered global losses of $13 billion. Emirates, like other international airlines, had to face global economic and political problems, but its fast reaction to these challenges across the network helped minimise their effects on operations.

Sheikh Ahmed commented: “We are, indeed, fortunate to be in a part of the world where the economy is booming, for when we compare our results with those of the world aviation industry in general they seem almost surreal.”

Sheikh Ahmed underlined the fact that Emirates does not receive any subsidies whatsoever from the Dubai government nor any protection from competition.

Emirates Airline / Dnata

The airline carried 8.5 million passengers, an increase of 26 per cent over last year’s total of 6.8 million. It is 20th in size among international airlines and one of the five most profitable. Capacity rose 28.5 per cent in available tonne kilometres, while the passenger seat factor - despite the increased capacity - rose 2.3 percentage points, up from 74.3 per cent the previous year. The overall load factor was 70 per cent, up from 68.3 per cent the previous year. Tonnage, shipped by Emirates SkyCargo, was up 31.1 per cent to a record 525,188 tonnes.

During the 2002/03 financial year, services were launched to Casablanca, Khartoum, Mauritius, Perth, Osaka and Cochin, bringing the number of destinations to 64 in 45 countries. Frequencies were increased at a number of destinations, including London, Johannesburg and Tehran.

Emirates’ Destination and Leisure Management division, which includes the wholesale tour-operating combining Emirates Holidays, the Dubai Destination Management Company Arabian Adventures and the Al Maha Desert Resort, registered a 22 per cent growth in capacity, with over 208,000 clients and particularly strong outbound sales.

Maurice Flanagan, Emirates’ Group Managing Director, commented: “In a desperately wobbly year for the world’s airlines, we remained on course for achieving yet another target as we kept moving the goalposts in our quest for Emirates to become a global brand.”

“Dnata, too, in its 44th year, continues to find its way into the record books,” he said. “At Dubai International Airport, Dnata’s Airport Operations took care of 16.5 million passengers and 924,000 tonnes of cargo.”

The division turned around nearly 70,000 aircraft during the year, in addition to handling increased traffic from Terminals One and Two.

The main terminal saw an 11 per cent growth in volume which far exceeded the worldwide industry average of five per cent. The Freezone Logistics Cargo Terminal (FLC) was doubled in size to 19,000 sqm to help meet an expected 173 per cent growth in business.

Dnata Agencies remains the largest travel agency in the Middle East and probably the biggest retail travel outfit in the world with 29 airline sales offices under one roof. The year saw the division register an eight per cent increase in overall revenue.