Emirates in a sombre mood

Finding the word sombre in an Emirates press release is a rarity. A carrier that has just set new group and airline profit records, boosted its dividends to new highs and seen revenue growth of 27% would seem to have little to worry about.

But sky high fuel prices affect even the most stalwart carriers. In announcing its annual results for the financial year that ended on 31 March, Emirates noted that its fuel bill rose from 21.4% of spending in the previous year to a record 27.2%, making its easily the largest of all its costs.

Surcharges on tickets helped to soften the blow, but only covered 41% of incremental costs, it said. Hedging helped too, saving the company $189 million, double what it saved the previous year.

So now comes its warning: "The outlook remains somber in a volatile global market where oil prices have hit new highs."

The worry for those competing with Emirates is that it can achieve such profits in this environment. And there is surely more to come. Opening the review of its annual results, Sheikh Ahmed bin Saeed Al-Maktoum, chairman and chief executive of the Emirates Airline and Group (seen above) sought to debunk accusations that his carrier receives hidden government support and subsidies.

"Profitability through growth seems to have become a theme of Emirates for the past decade," he said. "I must stress that we have never set out to be a threat to any other airline. We have simply concentrated on trying to provide a superb service for our passengers and cargo customers."

The Emirates bandwagon just seems to roll on and on.