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11/05/2017 - 17:11hs

Emirates sees 82% drop in profit

For the first time since 2012, the airline based in Dubai, the United Arab Emirates saw net income dwindle from one fiscal year to the next.

São Paulo – Emirates, the airline based in Dubai, the United Arab Emirates, reported on Thursday (11) a net profit of USD 340 in the fiscal year ended March 31. Website Gulf Business reported an 82% drop from the preceding year, due to the “relentless rise” of the USD dollar relative to the UAE’s dirham.

IT was the first time since the 2011-2012 fiscal year that the UAE-based carrier saw its profit drop year-on-year. In addition to the currency issue, the airline mentioned several “destabilizing events,” among them the Brexit (the United Kingdom’s decision to step out of the European Union) and the United States president Donald Trump’s restrictions on inbound flights from the Middle East.

Although profit shrank, revenue remained flat at USD 23.2 billion, with passenger numbers going up 8% to a record 56.1 million. The carrier’s fuel expenditure reached USD 5.7 billion, up 6% from the prior fiscal year – even though the average price per liter dropped slightly. Fuel accounted for 25% of total costs for Emirates, down from 26% the year before.

Emirates chairman sheikh Ahmed bin Saeed al-Maktoum said the company expects another challenging year ahead. Over the last two years, Middle East airlines saw a slowdown in growth prompted by factors such as escalating terror attacks and shrinking household budgets, a consequence of the international oil price slump.

The UK-based industry consultant John Strickland told Gulf Business that he expects Emirates to “to keep a tighter rein on its capacity growth in the short to medium term.” In December, Emirates deferred deliveries of 12 Airbus 380 superjumbos.

*Translated by Gabriel Pomerancblum

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