Emirates Reports a 77% Jump in Profit, With New First-Class Product on the Way
After a big profit drops, Emirates is bouncing back. The Dubai-based carrier announced on Thursday that its first-half net profits rose 77%, with net income increasing to 2.3 billion dirhams ($630 million) in the six months that ended on September 30. In addition, sales rose 6% to 49.4 billion dirhams — it carried 29.2 million passengers, which is 4% more than the same period in 2016.
The drastic increase in profits is a big change for the airline owned by the Dubai government. In May, it reported that its profits dropped by more than 80% for the past year — its first annual earnings decline in five years. The carrier blamed its losses on heightened immigration concerns in the US (including the travel and electronics bans), terror attacks in European cities, an attempted military coup in Turkey, a strong US dollar and Brexit.
Emirates is saying that its profit increase is thanks to 3,000 job cuts in six months and a more stable dollar. In addition, the carrier has begun charging fees for some perks, such as advance seat selection. There were also rumors swirling that Emirates could begin charging business-class passengers to use the A380's famed onboard shower.
Other factors could have contributed to higher profits for Emirates as well. For example, the US lifting the electronics ban, which not only affected Emirates but several other Middle Eastern and African carriers. As Bloomberg reports, the Mediterranean immigration crisis has also slowed and European tourism has rebounded.
While Thursday’s announcement is good news for the carrier, it still has quite a bit to worry about, according to Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum — increased competition, rising fuel costs, and continued weak economics and political uncertainty in some of its markets.
Emirates is set to unveil its new first-class product at the Dubai Air Show next week. The new first class will originally appear on Boeing 777-300ER aircraft, and hopefully on A380s shortly after that. Emirates may also place an order for more A380s next week as well.