Emirates Airline profits are down by 86% and things may not get better soon
- Emirates Airline profits over the first six months of its fiscal year are down a whopping 86% over the same period in 2017.
- The airline reported $62 million in profits on $13.3 billion in revenue for the six-month period ending on September, 30.
- Emirates Group, the airline's parent company, saw approximately $1.25 billion in profits wiped out due to fuel costs and currency devaluation in Asia, Africa, and South America.
- Emirates Group CEO warns that "the next six months will be tough."
Emirates Airline profits over the first six months of its fiscal year are down a whopping 86% over the same period in 2017. According to Reuters, this is the carrier's worst such period in a decade.
During the six-month period ending on September 30, Emirates reported $62 million in profits on $13.3 billion in revenue. Even though revenue grew by 10%, the airline's profits were severely impacted by a 42% increase in fuel costs.
As a result, Emirates's profit margins for the period is down from 3.7% to just 0.5% while cash assets are down 17% to $4.6 billion.
Read more: The 10 best airlines in the world for 2019.
The airline's parent company, Emirates Group, saw profits fall 53% to $296 million on $14.8 billion in revenue.
According to Emirates Group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum, high fuel costs, as well as currency devaluations in India, Brazil, Angola, and Iran, wiped out roughly $1.25 billion in profits.
"We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields, and uncertain economic and political realities in our region and in other parts of the world," Sheikh Ahmed said in a statement. "We are keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes."
Unfortunately, things aren't expected to get better in the near future.
"The next six months will be tough, but the Emirates Group's foundations remain strong," he added.
Since March, the Emirates Group has trimmed its employee base by nearly 1,400 people.