DUBAI, United Arab Emirates, May 10 – A strong US dollar and the “double-edged sword” of low oil prices have hit the revenues of Emirates, but net profit still surged 56 percent as passenger numbers rose and fuel bills dropped, the airline said Tuesday.
Dubai’s carrier said its profit hit $1.9 billion in the financial year 2015-16.
Emirates said however that its revenues dropped four percent to $23.2 billion, mainly as a result of a strong US dollar against currencies in most of its markets.
The largest Middle East carrier said it carried 51.9 million passengers, up eight percent from the year before.
Emirates chief executive officer Sheikh Ahmed bin Saeed al-Maktoum hailed a 28th consecutive year of profit for the Gulf carrier, but told reporters that a strong dollar to which the UAE dirham is pegged “will continue to be a challenge.”
In a statement to the press, he spoke of an “unfavourable currency situation which eroded our revenues and profits.”
He also spoke of “weak consumer confidence and investor sentiment,” highlighting a negative impact from record low oil prices on global business.
“We expect that the low oil prices will continue to be a double-edged sword — a boon for our operating costs, but a bane for global business and consumer confidence,” he said.
Emirates said the “relentless rise” in the US dollar had a $1.6 billion impact on the airline’s revenue.
Lower oil prices have reduced the airline’s fuel bill by 31 percent to $5.4 billion.
Fuel continues to be the carrier’s biggest cost item, but it has dropped from 35 percent to 26 percent of the total.
Emirates Group as a whole, which also includes dnata airport and travel services, posted a 50 percent increase in profit to $2.2 billion, with revenues increasing three percent to $25.3 billion.
In the previous year, Emirates airlines annual profit rose 40 percent to $1.2 billion on the back of lower fuel costs and increased revenues.
The largest operator of the Airbus A380 superjumbo and Boeing’s 777 widebody expanded its fleet to 250 aircraft last year.
It serves more than 153 destinations from its hub at Dubai International — ranked the world’s busiest airport for international passengers last year.