Emirates airline’s net profits nearly tripled to $235 million in the first half of the 2019-20 financial year but its ground handling counterpart, dnata, felt the impact of the Thomas Cook collapse.
Profits for the airline were up 282% compared to the same period last year despite the temporary closure of the southern runway at Dubai International and a 3% dip in revenues to $12.9 billion.
Emirates’ operating costs reduced by 8%, thanks in part to a 13% decrease in fuel prices compared to the same period last year. Fuel remained the largest cost, accounting for 32% of operating costs.
During the first six months of 2019-20, Emirates received three A380s, with three more new aircraft scheduled to be delivered before the end of the 2019-20 financial year. It also retired six older aircraft from its fleet with a further two to be returned by 31 March 2020.
Emirates’ dnata division increased turnover by 5% to $2 billion, largely thanks to strong growth in its catering division, but profits fell by 64% to $85 million.
The drop in profits was attributed to dnata’s divestment of its 22% stake in Hogg Robinson Group (HRG) and Thomas Cook’s bankruptcy.
Sir Tim Clark, president of Emirates, previously warned that dnata was expecting its half year results to be impacted by fallout from the Thomas Cook collapse.
The now defunct UK holiday operator was a major customer for dnata’s travel and catering businesses in the UK.
HH Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates, said that overall the group had delivered a “steady and positive performance” during the period by adapting to tough trading conditions.
He said: “Both Emirates and dnata worked hard to minimise the impact of the planned runway renovations at DXB on our business and on our customers. We also kept a tight rein on controllable costs and continued to drive efficiency improvement, while ensuring that our resources were deployed nimbly to capitalise on areas of opportunity.
“The lower fuel cost was a welcome respite as we saw our fuel bill drop by AED 2 billion compared to the same period last year. However, unfavourable currency movements wiped off approximately AED 1.2 billion from our profits.
“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins.
"As a group we remain focussed on developing our business, and we will continue to invest in new capabilities that empower our people, and enable us to offer even better products, services, and experiences for our customers.”
Group revenue reduced by 2% mainly due to capacity reductions during the 45-day runway closure at Dubai International airport (DXB) and global currency fluctuations. Profits for the Emirates Group increased 8%.