The Emirates Group has announced
record-breaking net profits of Dhs 2.6 billion (US $708 million) for the
financial year ended 31st March 2005 - an impressive Dhs 853 million ($232
million), or 49 per cent, over the previous year. Group revenue increased by Dhs 5.1 billion ($1.4 billion) or 36 per cent, to
Dhs 19.1 billion ($5.2 billion) vs. Dhs 14 billion ($3.8 billion) last year.
The Group’s cash balance totaled a robust Dhs 8.2 billion ($2.2 billion) at
the end of March, an improvement of 12 per cent vs. Dhs 7.3 billion ($2.0
billion) a year earlier. 

For 2004-05 Emirates will pay an increased dividend of Dhs 368 million ($100
million) to its owner, the Government of Dubai, vs. Dhs 329 million ($90
million) last year. In total, the ownership will have received Dhs 1.1
billion ($291 million) from Emirates since dividends started being paid six
years ago. 

 

Once again, the Group’s sharp sales growth and record returns rode on
customers’ increasing preference for its products, as illustrated by the 2.1
million more passengers who flew Emirates in the latest financial year, for
a new record total of 12.5 million. 

 

The 2004-05 Annual Report of the Emirates Group - comprising Emirates
Airline, Dnata and subsidiary companies - was released here today at a news
conference hosted by its Chairman, His Highness Sheikh Ahmed bin Saeed
Al-Maktoum.

 

Sheikh Ahmed said: “We’ve had yet another successful year for the company,
and the 17th consecutive profitable one for the airline. Our customers are
the pillar of Emirates’ good fortune. Their continued custom is a vote of
confidence in the high-value product that we constantly strive to give
them.” 

 

He added: “We are gratified by the strong financial results of the Group.
The rapid-growth Emirates business model requires a high rate of return to
sustain our enormous investments in people, advanced equipment and
facilities, as well as in IT and other support services.

 

“As before, after paying a fair dividend to the Group’s ownership and
rewarding our employees with a well-deserved bonus, we will plough our
healthy profits right back into the business to keep our airline and
travel-related group of companies competitive, and to keep treating our
customers in the manner they’ve come to expect from Emirates.”

 

The Chairman continued: “These results prove once again what has always been
clear to us: we can count on our customers to support Emirates, as long as
we deliver on our side of the equation - the best aircraft that money can
buy, the best ground- and inflight service in commercial aviation, and the
best overall flying experience at a competitive price.” 

 

In his opening review in the 2004-05 Annual Report, Sheikh Ahmed commented
on how the industry, already struggling with continually changing global
economic conditions, had been further impacted by a dramatic rise in jet
fuel prices. At Emirates, fuel costs rose from 14 per cent of total
operating expenditure to 21 per cent and became the airline’s top
expenditure, from a distant second in 2003-04. 

 

Measures taken by the Group to remain on target included severe cost-cutting
steps such as a recruitment freeze - except for Flight Deck, Cabin Crew and
Engineering staff. In addition Emirates, like other airlines, also was
forced to increase fuel surcharges on tickets, which did not fully cover the
escalating costs. The airline’s jet fuel risk management programme helped to
bring its fuel costs down by $126 million in 2004-05, but the price outlook
remains sombre.

 

Going forward, Sheikh Ahmed described the dramatic and sustained run-up on
jet fuel prices as the most formidable challenge faced by Emirates, and the
single largest threat to the achievement of the Group’s financial goals in
the current financial year.

 

Sheikh Ahmed also commented on how Emirates’ robust results were achieved
without any government assistance or subsidies, and added: “Since we started
the airline in 1985, our competitors seem to find it incomprehensible that
we can make profits by having a skilful team which works hard, is a market
leader and invests heavily in new equipment - surely the criteria for any
successful company?”

 

In a tribute to the strong leadership of Dubai that has created the
conditions under which Emirates has thrived since its inception, Sheikh
Ahmed said: “We are indeed fortunate to be based in Dubai, where a visionary
government is investing billions of dollars to develop the city into a major
commercial, residential and tourist hub, and the Emirates Group is playing a
pivotal role.”
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