Rising fuel costs force Emirates annual profits nosedive

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Dubai’s Emirates airline group announced Thursday its net profit slumped 61% last year due to rising fuel costs and economic uncertainty.

Total profits for the Dubai flag carrier and its subsidiaries registered a drop of AED2.3 billion ($629 million) in 2011-2012 from AED5.9 billion ($1.6 billion) for the previous year, the company said.

The airline raked AED1.5 billion ($409 million) in net profits, compared with AED5.4 billion dirhams ($1.5 billion) for the same period in the year before.

“Achieving our 24th consecutive year of profit and maintaining an upward growth trajectory is an achievement that belies the industry norm,” said chairman and chief executive Sheikh Ahmed bin Saeed al-Maktoum.

The company said in a statement that Emirates Group continued to invest in and expand on its employee base despite a difficult operating environment, and managed to increase its overall staff count by more than 10%.

Profits partly dropped due to massive new investments as well, the statement added.

“Throughout the 2011-12 financial year the Group has collectively invested close to AED14 billion ($3.8 billion) in new products. This investment has garnered new customers and increased our international presence,” Sheikh Ahmed said.

Emirates acquired a staggering 22 new aircraft, its highest in any single year, during 2011-12 by acquiring funding from a wide variety of financing structures, the statement continued.

The world’s fastest growing airline further expanded its network by adding 11 new destinations and increasing capacity to 34 cities, a record for the Dubai-based carrier.

The company statement said its income reached a record high of AED62.3 billion ($17 billion), up 14.9% from 2010-2011, but despite strong revenue growth, the spiralling cost of jet fuel impacted the net profit.

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