Emirates Group hires 10% more staff following record profits

Reuters/Abdel Hadi Ramahi

• Group makes $1.2bn half-year profit
• It made a $1.6bn loss over same period last year
• Chairman warns of inflationary costs and strong US dollar

Emirates Group reported a record half-year profit on Thursday despite fuel costs trebling as passenger numbers soared and customers opted for premium seats. 

The Dubai-based conglomerate, which includes Emirates Airline and travel agent dnata, attributed its performance to strong demand for air travel following the gradual easing of Covid 19-related restrictions worldwide. 

Middle East airlines reported a 149.7 percent increase in traffic in September 2022 versus September 2021, according to the International Air Transport Association. 

• Emirates airline cuts annual loss to $1.1bn as travel rebounds

“For the coming months, we remain focused on restoring our operations to pre-pandemic levels,” Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Airline and Group, said in a statement. 

“We expect customer demand across our business divisions to remain strong in H2 2022-23. 

“However, the horizon is not without headwinds and we are keeping a close watch on inflationary costs and other macro-challenges such as the strong US dollar and the fiscal policies of major markets.”

The group made a net profit of AED4.2 billion ($1.2 billion) in the six months to September 30. That compares with a loss of $1.6 billion the prior year. 

Revenue rose 128 percent year-on-year to $15.3 billion, while earnings before interest, taxes, depreciation and amortization (EBITDA) nearly trebled to $4.2 billion. 

This enabled Emirates Group to report a profit margin of 7.4 percent. 

Its profit margin for full-year 2018-19 – the last before the Covid 19 pandemic – was 2.1 percent, while its highest full-year profit margin since 2012 was in 2015-16 when it reached 8.8 percent.

Most of the group’s earnings come from the airline, which reported a 131 percent annual rise in half-year revenue to $13.7 billion, while its EBITDA was $4 billion and profit was $1.1 billion. That gave the airline a profit margin of 8.0 percent. 

“There were no one-off gains that were not disclosed in the half-year results for the airline,” said an Emirates spokesperson.

Emirates carried 19.96 million passengers, more than three times the previous year, as its flights were 78.5 percent full. That compares with 47.9 percent a year earlier. 

“Emirates’ profitability stemmed from robust customer demand as reflected in the high seat load factor,” the spokesperson added.

“In addition, we saw higher yields coming from a better class mix, as Emirates saw strong demand for our premium seats across the network.”

Cargo volumes fell 14 percent to 936,000 tonnes. 

Emirates’ operating costs rose 73 percent year-on-year, outpacing a 40 percent increase in capacity that it said was mainly due to fuel costs trebling year-on-year.

The airline used 65 percent more fuel as it expanded services, while oil prices more than doubled. 

Fuel represented 38 percent of operating costs, in what Emirates said was one of the highest ever and up from 20 percent a year earlier. 

Emirates Group hired 8,674 new employees to expand its workforce to 93,893 as of September 30. 

Dnata’s revenue doubled year-on-year to $2 billion, helping its profit to surge to $64 million from $23 million, despite EBITDA growing by a more modest 10 percent to $175 million.