Dubai's Emirates Airline said Thursday annual profits have surged 40 percent to $1.2 billion as revenues increased and fuel costs dropped.
The Middle East’s largest carrier said revenues rose seven percent to $24.2 billion with passenger numbers up 11 percent to 49.3 million in the financial year 2014-15.
Emirates chief executive officer Sheikh Ahmed bin Saeed al-Maktoum said the profit was achieved “despite a tough market and stiff competition.”
The company said a significant drop in the price of jet fuel had reduced operating costs by seven percent to $7.8 billion.
Fuel represented 35 percent of operating costs, down from 39 percent the previous year.
The Emirates chief described the drop in oil prices as a “welcome relief” that impacted the second half of the financial year.
A global supply glut has eroded prices by around 60 percent since last year.
Emirates said it faced challenges including a weaker US dollar, to which the UAE dirham is pegged, as well as an 80-day runway closure at its hub for upgrading.
– Competitors ‘lobbying’ –
Sheikh Ahmed also spoke of the challenge from competitors, alluding to US carriers pushing Washington to take action against fast-growing Gulf carriers over alleged state subsidies.
“Our competitors challenge us everyday and some are lobbying their government to restrict us,” he said in a clear reference to big US carriers — Delta, United and American Airlines.
The carriers allege that the Gulf Big Three: Emirates, Qatar Airways and Abu Dhabi’s Etihad have received government subsidies worth $40 billion.
They accuse the Gulf three of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses and below-market labour costs that are considered unfair subsidies by the World Trade Organisation.
“On this front, our position has always been clear: we embrace competition because it is good for the consumer … industry and … also us,” he told reporters.
“We just have to stay ahead of our competition,” he added.
Sheikh Ahmed charged that the “noise” was coming from legacy carriers which “thought nobody can overtake them.”
The three Gulf carriers have seized a large chunk of global travel, turning their hubs into major stops on transcontinental routes.
The US carriers do not differentiate between what is a subsidy and what is “legitimate” for a state-owned carrier, according to Qatar Airways chief Akbar al-Baker.
Etihad Airways chief James Hogan had said his company was a “David” battling the US “Goliaths”, accusing the three US carriers of themselves hiding behind protection.
Emirates operates a fleet of 219 passenger aircraft and 14 freighters, serving 144 destinations in 81 countries.
The airline operates the world’s largest fleets of Airbus A380s and Boeing 777s.