Emirates Airline Receives Lift From Low Oil Prices

DUBAI—Emirates Airline on Tuesday reported a 56% jump in full-year net profit, as the state-owned carrier was boosted by low oil prices and increased passenger numbers.

Net profit for the financial year ending March 31 rose to $1.9 billion from $1.2 billion a year earlier, Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum told a news conference. Full-year revenue dropped 4% to $23.2 billion from $24.2 billion a year earlier.

The drop in oil prices since the middle of 2014 has boosted profits for global airlines. Emirates' fuel bill was reduced by 31% and now constitutes 26% of its operational costs compared with 35% the previous year, the company said.

At the same time, low fuel and the strong dollar have affected the airline's revenues, Sheikh Ahmed said.

"Each year brings a new set of challenges and last year was no different," Sheikh Ahmed said. "Low oil prices will continue to be a double-edged sword," he said.

Emirates is the oldest and biggest of the three major Persian Gulf airlines, along with Etihad Airways and Qatar Airways, which over the past decade have overtaken more established competitors in Europe and the U.S. They've done so by investing heavily in new planes and by aggressively expanding their world-wide networks, using major airports in cities like Doha and Dubai as hubs to facilitate long-haul traffic between the continents.

The Gulf airlines' rapid ascension has irked some U.S. carriers including Delta Air Lines and American Airlines Group Inc. who accuse the trio of receiving state subsidies that give them an unfair advantage over their competitors. The Gulf airlines deny those allegations.

Emirates, whose history dates back to 1985, today is the world's largest carrier by international capacity. In the last fiscal year, the airline carried 51.9 million passengers, 8% more than the previous year.

Emirates Group, which includes the airline, airport services provider Dnata, a number of luxury hotels and other facilities in Dubai, posted a 50% year-over-year increase in full-year net profit to $2.2 billion.

The Abu Dhabi-based rival carrier Etihad Airways last month posted a 41% jump in full-year net profit to $103 million as it also carried more passengers.

Write to Nicolas Parasie at nicolas.parasie@wsj.com

(END) Dow Jones Newswires

May 10, 2016 04:15 ET (08:15 GMT)

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