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Emirates profits plunge after hard year

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Airline blames “relentless rise of the US dollar”
Emirates blames “the relentless rise of the US dollar” for its 82% profit slump over the last year and a group result that plummeted 70%.
The group recorded $670 million profit for the year to the end of March 2017, with the airline making a $340 million contribution and tour and airport operator and ground handler dnata making its highest ever profit of $330 million.
The airline reported “significant currency devaluations” against the US dollar and lower fares “due to a highly competitive business environment”.
The group added: “The relentless rise of the US dollar against currencies in most of Emirates’ key markets had a $572 million impact on airline revenue, and to the airline’s bottom line.”
The ban on cabin electronic devices on flights to the US also had an effect, it said. All these factors pushed airline profits down 82% year on year, bringing a profit margin of just 1.5%.
Emirates increased seat capacity by 10% during the year, with 35 new aircraft delivered, bringing the total fleet to 259. Six new destinations were added, Fort Lauderdale, Hanoi, Newark, Yangon, Yinchuan and Zhengzhou. The airline carried a record 56.1 million passengers, up 8%, but average load factors fell from 76.5% to 75.1% due to expansion.
The Brexit vote, Europe’s immigration challenges, terror attacks and new policies impacting US air travel have all had an impact, Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates, said. Currency devaluation and funds repatriation issues in parts of Africa, plus a sluggish oil and gas industry have hit demand, he said, but he added: “Emirates and dnata have continued to deliver profits and grow the business, despite 2016-17 having been one of our most challenging years to date.”
TTG Digital

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