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Emirates airlines first half profit surges on cheaper fuel, cost cuts

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By Reuters
Emirates airlines first half profit surges on cheaper fuel, cost cuts
FILE PHOTO: Emirates Airlines Airbus A380-800 plane approaches for landing at Dubai Airports in Dubai, United Arab Emirates, December 26, 2018. REUTERS/ Hamad I Mohammed/File Photo   -   Copyright  Hamad I Mohammed(Reuters)

DUBAI (Reuters) – Emirates, one of the world’s biggest international airlines, said on Thursday profit nearly quadrupled in the first half of the year, bouncing back from a decade low half-year profit a year ago.

Dubai-based Emirates, which is owned by the state, benefited from a decline in global fuel prices although it said it was hit by unfavourable currency movements.

The airline, which said last month its profits would be considerably better, made 862 million dirhams (£183 million) in the six months to Sept 30, compared to the 226 million dirhams it made a year ago.

Revenue fell 3% to 47.3 billion dirhams with operating costs cut by 8%, helped by the decline in fuel costs.

Emirates carried 29.6 million passengers, a 2% decline after the airline reduced the number of seats it offered by 5% in part due to a 45-day closure of a runway at its Dubai hub.

The amount of cargo it carried declined 8% to 1.2 million tonnes.

“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins,” said Chairman Sheikh Ahmed bin Saeed al-Maktoum.

Emirates Group, which includes the airline and airport services unit dnata, made 1.2 billion dirhams, up 8%. Revenue shrank 2% to 53.3 billion billions.

Sheikh Ahmed said the fuel bill was 2 billion dirhams cheaper than a year ago but said unfavourable currency fluctuations cost it 1.2 billion in profit.

Dnata, which operates at airports around the world, suffered a 64% fall in profit to 311 million dirhams. It booked a 84 million dirhams impairment on amounts it was owed following the collapse of Thomas Cook in September.

Thomas Cook’s bankruptcy has had a broad impact, affecting hotel owners across Europe, holiday booking sites in Asia and airline support services around the world.

(Reporting by Alexander Cornwell; Editing by Edmund Blair)