The Emirates Group has reported its 21st consecutive year of net profit for its 2008-09 financial year despite unprecedented challenges for the airline and travel industry.

The Group’s net profit of AED 1.49 billion (US$ 406 million) for its financial year ending 31st March 2009, was down 72 per cent from the previous year’s record profits of AED 5.3 billion (US$1.45 billion), showing the impact of the record fuel prices in the first six months of the year, and the impact of the global recession.At the same time, Group revenues of AED 46.3 billion ($ 12.6 billion), representing an increase of 10.4 per cent over the previous year’s AED 41.9 billion ($ 11.4 billion), reflects continued business growth.

The Group also retained a healthy cash balance of AED 8.7 billion ($ 2.4 billion) compared with AED 14 billion ($ 3.8 billion) the previous year. This cash position is after funding new aircraft orders, new construction projects to build a twin tower hotel and staff accommodation, dividends paid to the company’s owners, and massive product and service investments including the hundreds of millions of dollars invested to develop dedicated Emirates Lounges across the network and retrofitting aircraft to align the interiors across the young fleet.

In 2008-09, the Group estimates a total contribution of AED 58.8 billion ($ 16.0 billion) to the UAE economy.

HH Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: “We have returned our 21st consecutive year of net profit, and although it is a 72 per cent decrease on the previous year’s all-time record profit, under the circumstances this is a satisfactory result.”

The Group’s performance this year demonstrates its flexibility in a challenging economic period, and its ability to strategically grow its business and customer demand. During the year, the company strengthened its operations with investments in technology, new products and customer service, while keeping a tight rein on costs.

The past year saw the first six months posting record fuel prices with oil rising to US$147 (AED 540) a barrel, and then a decrease in demand from the weakened global economy was followed by declining yields with the strengthening US Dollar against major currencies, which all contributed to lower profitability and lower net margin for the Group at 3.3 per cent, compared to 13.2 per cent in the previous year.

Fuel costs remained the top expenditure for the 5th year running, accounting for an unprecedented 36.2 per cent of airline operating costs compared with 32.9 per cent the previous year.

Sheikh Ahmed commented: “No one could have predicted the scale of the worldwide recession which is now impacting every country on earth. Emirates has worked hard to cope with this downturn by maintaining our agility and responsiveness in a volatile economic environment.

“We have met these challenges with determination, improved efficiencies and innovative market-leading initiatives. In 2008-09 financial year, our group achieved two significant milestones: Emirates accepted delivery of its first A380 heralding a new era in our eco-efficient aircraft fleet with Dnata playing a significant role in developing the ground handling processes to manage this pioneering aircraft; and we witnessed the smooth opening of the state-of-the-art Terminal 3 at Dubai International Airport - a remarkable new facility dedicated to Emirates operations, with Dnata overseeing the ramp operations and managing the state of the art baggage system.”

The full 2008-09 Report and Accounts of the Emirates Group - comprising Emirates airline, Dnata and subsidiary companies - is available on www.ekgroup.com/mediacentre 
——-