INDIA & MIDDLE EAST: Record-setting 2010 results for Emirates

Emirates SkyCargo has reported record revenue of Dh8.8 billion (US$2.4 billion) last year, a 27.9 per cent jump on 2009, thanks to a “worldwide rebound” in cargo traffic. This impressive result helped the Emirates Group achieve similarly record-setting revenues of $15.6 billion in 2010, 26.4 per cent higher than a year earlier, while net profit […]


Emirates SkyCargo has reported record revenue of Dh8.8 billion (US$2.4 billion) last year, a 27.9 per cent jump on 2009, thanks to a “worldwide rebound” in cargo traffic. This impressive result helped the Emirates Group achieve similarly record-setting revenues of $15.6 billion in 2010, 26.4 per cent higher than a year earlier, while net profit surged 51.9 per cent to Dh5.4 billion. The group – mainly comprising carriers Emirates and its ground handling unit Dnata – announced its latest results at a news conference hosted by chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum. “Despite unforeseen challenges in the form of political instability and shocking natural disasters we have managed, through sheer determination, nimbleness and quick thinking, to produce our best-ever result,” said Al Maktoum. He also noted that Emirates has “faced the same challenges” as other carriers, citing disruption caused by the Icelandic volcanic eruption and earthquakes in New Zealand and Japan, as well as rising fuel prices. Cargo revenue contributed 17.4 per cent of the airline’s total transportrelated revenue which makes it one of the highest contributions of any airline in the world with a similar fleet, said Al Maktoum. Cargo tonnage increased by 11.8 per cent over the previous year to 1.76 million tonnes, while yield per freight tonne km was up 11.3 per cent. During the year, SkyCargo introduced four maindeck destinations: Almaty, Bagram, Campinas and Erbil, with its freighter fleet of seven aircraft – three on wet lease and four on operating lease. The year’s cargo results were uneven noted SkyCargo’s divisional senior VP for Cargo, Ram Menen, who said that while inventory restocking fed much of the growth in the first half, this eased off as inventories built up. Shippers had also avoided placing orders at Chinese factories in the second-half of last year, because the dollar had weakened against China’s yuan, making goods more expensive for western consumers and high fuel prices also resulted in some deferment of orders. Looking at this year, Menen noted that political turmoil in north Africa and the Middle East and Japan’s earthquake had dampened demand. As a result the Emirates Group has downgraded its growth prediction for the industry this year from 8-10 per cent growth to 4-6 per cent. Menen remains positive on the remainder of the year, citing efforts to restore Japanese production, falling oil prices in recent weeks and the potential for some degree of restocking towards the end-of-the-year peak season. Overall for the group, operating costs were 22.7 per cent higher than the 2009-10 financial year, due to the rise in fuel prices and increased activity levels, as well as the associated growth in staff numbers and a rise in direct operating costs such as handling, in-flight costs and aircraft maintenance. A sharp increase of 41.2 per cent in the cost of fuel accounted for 34.4 per cent of the carrier’s total operating costs. Emirates took delivery of eight new aircraft during the year, including one B777-300ER and seven of the airline’s flagship A380s, expanding the fleet size to 148 aircraft, including 15 A380s and 86 B777s. “Being open to competition, new ideas and, most importantly, the future, ensures that we stay ahead of the game,” said Al Maktoum. “Looking ahead, we have no plans to deviate from our proven strategy of investing in our business and focusing on core customer service. “As we continue to grow, we are ambitious enough to believe that we can stimulate change in the aero political arena, for the benefit of the industry and the customers that it serves.”