Emirates airline profits hit by higher fuel bill

Emirates Group, the parent company of the Middle East's biggest airline, said Thursday its annual profit tumbled 61 percent as soaring fuel costs ate into increased sales.

The fast-growing company posted earnings Thursday of 2.31 billion dirhams ($629.4 million) for the fiscal year ending March 31. That compares with earnings of 5.95 billion dirhams a year earlier.

It is the 24th year in a row Dubai-based Emirates says it has turned a profit, an unusually long winning streak in the industry.

Although it hails from an oil-rich region, the company is not immune to the high fuel prices plaguing the industry. Emirates said its fuel bill jumped 44 percent over the previous year, wiping out a double-digit rise in sales.

It also grappled with fallout from the Arab Spring unrest, which upended flight schedules to a number of regional destinations.

Revenue increased nearly 18 percent to 67.39 billion dirhams ($18.36 billion).

Sheik Ahmed bin Saeed Al Maktoum, the company's chairman and chief executive, attributed Emirates' ability to stay profitable to "sustained and calculated investment" in the business. But he acknowledged that rising costs were taking their toll.

"Managing volatile exchange rates, coupled with our highest ever fuel bill has required immense tenacity. Retaining growth and remaining profitable in these challenging economic times shows our profound understanding of the markets that we do business in," Sheik Ahmed said in a statement.

Emirates Group, which is owned by Dubai's government, includes Emirates airline and several smaller businesses, such as the travel service and cargo division Dnata.

The airline posted a profit of 1.5 billion dirhams, down 72 percent.

Dnata acquired a majority stake in online travel agency Travel Republic and half of a South African in-flight catering company last year. The division grew its revenue by nearly 60 percent, and posted its best profit yet of 808 million dirhams.

Emirates is the world's largest airline in terms of international passenger traffic. It flies to more than 120 destinations in 73 countries.