Our half-yearly financial results, April to September 2012, had a more upbeat and pragmatic economic backdrop than those we have experienced in the past few rocky, recessionary years. We rode a wave of recovery, particularly in our hub Dubai.
We have four important firsts in this half-yearly results: the Emirates Group's revenue crossed the US$10 billion mark; dnata's financial results made its debut, reflecting the growth and the global nature of its operations; dnata's revenue shot past US$1 billion; and Emirates SkyCargo scored one million tonnes.
For the period 1st April to 30th September, the Emirates Group recorded revenue of Dhs38.2 billion (US$10.4 billion), an increase of 16% from 30th September 2011. Profits earned were Dhs2.1 billion (US$575 million), up by 68% from Dhs1.3 billion (US$343 million) last year.
Emirates' revenue and other operating income totalled Dhs35.4 billion (US$9.7 billion) - an increase of 17%. Profits jumped by 104%, from Dhs836 million (US$228 million) to Dhs1.7 billion (US$464 million).
dnata's revenue increased by 9% to Dhs3.8 billion (US$1 billion), up from Dhs3.5 billion (US$957 million), in a very competitive and challenging global market environment across all its businesses. Profits declined slightly by 4% to Dhs407 million (US$111 million), down from Dhs423 million (US$115 million).
The group's employee numbers increased by 8.4% to nearly 68,000 people.
Our milestones
From a customer standpoint, we hit several high notes in the past six months. Emirates took delivery of 13 aircraft during this period - including two A380s, 10 Boeing 777-300s and one freighter. By August, our A380s had carried more than 10 million customers since we first started operating them.
We started services to Ho Chi Minh City, Barcelona, Lisbon, Erbil, and Washington D.C., and increased capacity to a number of destinations. The new routes are performing well due to the convenient and flexible connections they offer our customers.
Undoubtedly, our partnership with Qantas is the most significant relationship we forged in the past six months. The approval requirements from various regulatory authorities are progressing well. Once we receive the go-ahead, it will create new advantages and opportunities for customers and employees of both airlines, in addition to further strengthening our Dubai hub.
dnata acquired a majority stake in En Route International Ltd, and dnata's subsidiary Alpha Flight Group and LSG Sky Chefs formed a joint venture company, covering its UK catering operations.
While other airlines and organisations were scaling back, we invested in our brands and our people, ensuring we continued on the path of sustainable growth. Emirates' Hello Tomorrow advertising campaign, launched in April, has resonated globally. Experts declared us one of the most engaged and fastest growing airlines on social media sites Facebook and Google+.
Our environment report, published in June, showcased our green credentials and Emirates Air Line, the cable car system inaugurated over the Thames before the Olympic Games, garnered us valuable international exposure.
Internally, we focussed on our people.
We will continue to embed the Hello Tomorrow philosophy internally, moving away from outdated systems and processes. It will usher in new ways of managing our people, change how we view ourselves and how we interact with our customers and one another, and open our minds to infinite possibilities. Some of these changes will be apparent instantly while others will be more long term.
dnata unveiled its five-year strategy in September and will focus on four pillars - people, customer, operations and finance - to achieve its vision. The One dnata programme gained significant traction internally, and I watched with pride as our people wore the distinctive new dnata and marhaba uniforms. The uniforms roll-out had its share of hiccups, but such large-scale projects are bound to have their challenges. dnata's Dubai airport operations team moved to new premises in line with the brand vision.
An organisation-wide focus on achieving on-time performance has reaped rich rewards. SiD, our new safety data management system launched in June, received 22% more Air Safety Reports in the first three months than the same period in 2011.
The near future
Our potential hurdles will continue to be high fuel prices, adverse closed skies policies, aviation taxation and legislations by governments worldwide. While Dubai welcomes all airlines to our hub, our competitors actively lobby their governments to close their borders to us and other airlines. With sustained efforts, including the Myth vs. Reality document, we have enjoyed some success in transforming public and government opinion.
Dubai's journey to recovery can be gauged by the traffic congestion! While not up to pre-recession levels, real estate prices and rents are on an upward trend, with the UAE reportedly accounting for around 45% of the GCC's construction industry business. Undoubtedly, Dubai has drawn huge investments and goodwill due to our government's policies and business infrastructure, as well as the Arab Spring in our backyard.
We must remember that despite our global presence, the Emirates Group's success is tied to the success of our Dubai hub, and we have a mandate to promote the city on the international stage.
We have much to look forward to. Rapid progress continues at Concourse A, which is set to open in the first quarter of 2013. The facility will ease our growth pains and will provide unparalleled levels of comfort and luxury to our customers.
From November 2012 to March 2013, we will take delivery of more than 15 aircraft. On 1st November we launched flights to Adelaide, and by end-March we will have started services to Lyon, Phuket, Warsaw and Algiers. Launching 10 new routes within a year highlights your can-do attitude and our organisational strength.
dnata has many exciting initiatives lined up: a revamped website, an engaging employee intranet, more integration between its business units and other programmes of work that support its strategy.
The group's commitment to innovation and our people will be seen in upcoming announcements on an ideas portal and an innovation lab.
Sustaining success
Emirates' strategy continues to be one of organic growth and dnata's of growth through acquisitions and diversification.
The group's profit target for this financial year ending 31st March 2013 is Dhs3.5 billion. What can we do to achieve it?
From an Emirates perspective, we need to boost our yields and profitability, which means we need to focus on filling our First and Business Class seats. To be counted among global lifestyle brands, our internal world needs to be aligned with our external brand promise. I urge our people managers to take responsibility for embedding the Hello Tomorrow philosophy within your teams. Lead by example and become the bridge that encourages a can-do spirit, creates an environment to help our people challenge conventional ways of thinking and doing business, while supporting them in their quest to exceed internal and external customers' expectations.
One dnata's success is down to each one of you. To be a truly global brand that delivers on the promises of your customers, you will need to drive deeper collaboration and wider integration across teams and business units.
As a group, we need to spend wisely to maximise benefits for our people, our customers and our brand. Be acutely conscious of costs and evaluate the returns on every dirham that we spend.
I have always said that the Emirates Group family of nearly 170 nationalities has a distinct advantage. By working together as an innovative, collaborative team, I know we can win every race and overcome any adversity.
I'm extremely pleased with the financial results and with your achievements these past six months. If we keep up the momentum, I have no doubt that we can reap rich dividends at the end of the financial year.
Ahmed bin Saeed Al Maktoum
Chairman & Chief Executive Emirates Airline & Group
The results in numbers:
Emirates
Emirates' costs rose by 15% to Dhs33.5 billion (US$9.1 billion), with fuel remaining our number one expense. We spent Dhs13.1 billion (US$3.6 billion) on fuel, which constitutes 39% of our total costs (slightly down from 41% last year). With a fleet size of 182 aircraft at the end of September 2012, which reflects an addition of 25 new aircraft since September 2011, our operating lease costs and aircraft depreciation costs have increased.
Our passenger numbers increased by 15% to 18.7 million, and seat factor rose to 80%, despite the capacity increase of 17%. Profit margin increased to 4.8% and yield remained steady. Available Seat Kilometres (ASKM) grew by 17.3% and Revenue Passenger Kilometres (RPKM) was up by 17.8%. Cargo volumes increased by 16% to 1,027 thousand tonnes.
Emirates' cash balance stands at Dhs13.2 billion (US$3.6 billion) as of the end of September - down from Dhs15.6 billion (US$4.2 billion) at the end of March 2012 - mainly because we kept our commitment and repaid a Dhs2 billion Sukuk bond in June.
dnata
dnata's operating costs grew by 11% to Dhs3.4 billion (US$940 million), compared with Dhs3.1 billion (US$850 million) last year. While the profit margin fell from 11.9% to 10.5%, dnata's cash balance remains strong at Dhs2 billion (US$551 million), and is nearly unchanged compared to March.
dnata's ground handling operation's revenue increased by 4% to Dhs1.2 (US$324 million) and it handled 130,684 aircraft, an increase of 5.6%; cargo handled 791,151 tonnes, an increase of 5%, and earned revenues of Dhs525 million (US$143 million); and catering provided 27.5 million meals, a slight decrease of 2.4%, and earned revenues of Dhs1.4 billion (US$377 million).
We have four important firsts in this half-yearly results: the Emirates Group's revenue crossed the US$10 billion mark; dnata's financial results made its debut, reflecting the growth and the global nature of its operations; dnata's revenue shot past US$1 billion; and Emirates SkyCargo scored one million tonnes.
For the period 1st April to 30th September, the Emirates Group recorded revenue of Dhs38.2 billion (US$10.4 billion), an increase of 16% from 30th September 2011. Profits earned were Dhs2.1 billion (US$575 million), up by 68% from Dhs1.3 billion (US$343 million) last year.
Emirates' revenue and other operating income totalled Dhs35.4 billion (US$9.7 billion) - an increase of 17%. Profits jumped by 104%, from Dhs836 million (US$228 million) to Dhs1.7 billion (US$464 million).
dnata's revenue increased by 9% to Dhs3.8 billion (US$1 billion), up from Dhs3.5 billion (US$957 million), in a very competitive and challenging global market environment across all its businesses. Profits declined slightly by 4% to Dhs407 million (US$111 million), down from Dhs423 million (US$115 million).
The group's employee numbers increased by 8.4% to nearly 68,000 people.
Our milestones
From a customer standpoint, we hit several high notes in the past six months. Emirates took delivery of 13 aircraft during this period - including two A380s, 10 Boeing 777-300s and one freighter. By August, our A380s had carried more than 10 million customers since we first started operating them.
We started services to Ho Chi Minh City, Barcelona, Lisbon, Erbil, and Washington D.C., and increased capacity to a number of destinations. The new routes are performing well due to the convenient and flexible connections they offer our customers.
Undoubtedly, our partnership with Qantas is the most significant relationship we forged in the past six months. The approval requirements from various regulatory authorities are progressing well. Once we receive the go-ahead, it will create new advantages and opportunities for customers and employees of both airlines, in addition to further strengthening our Dubai hub.
dnata acquired a majority stake in En Route International Ltd, and dnata's subsidiary Alpha Flight Group and LSG Sky Chefs formed a joint venture company, covering its UK catering operations.
While other airlines and organisations were scaling back, we invested in our brands and our people, ensuring we continued on the path of sustainable growth. Emirates' Hello Tomorrow advertising campaign, launched in April, has resonated globally. Experts declared us one of the most engaged and fastest growing airlines on social media sites Facebook and Google+.
Our environment report, published in June, showcased our green credentials and Emirates Air Line, the cable car system inaugurated over the Thames before the Olympic Games, garnered us valuable international exposure.
Internally, we focussed on our people.
We will continue to embed the Hello Tomorrow philosophy internally, moving away from outdated systems and processes. It will usher in new ways of managing our people, change how we view ourselves and how we interact with our customers and one another, and open our minds to infinite possibilities. Some of these changes will be apparent instantly while others will be more long term.
dnata unveiled its five-year strategy in September and will focus on four pillars - people, customer, operations and finance - to achieve its vision. The One dnata programme gained significant traction internally, and I watched with pride as our people wore the distinctive new dnata and marhaba uniforms. The uniforms roll-out had its share of hiccups, but such large-scale projects are bound to have their challenges. dnata's Dubai airport operations team moved to new premises in line with the brand vision.
An organisation-wide focus on achieving on-time performance has reaped rich rewards. SiD, our new safety data management system launched in June, received 22% more Air Safety Reports in the first three months than the same period in 2011.
The near future
Our potential hurdles will continue to be high fuel prices, adverse closed skies policies, aviation taxation and legislations by governments worldwide. While Dubai welcomes all airlines to our hub, our competitors actively lobby their governments to close their borders to us and other airlines. With sustained efforts, including the Myth vs. Reality document, we have enjoyed some success in transforming public and government opinion.
Dubai's journey to recovery can be gauged by the traffic congestion! While not up to pre-recession levels, real estate prices and rents are on an upward trend, with the UAE reportedly accounting for around 45% of the GCC's construction industry business. Undoubtedly, Dubai has drawn huge investments and goodwill due to our government's policies and business infrastructure, as well as the Arab Spring in our backyard.
We must remember that despite our global presence, the Emirates Group's success is tied to the success of our Dubai hub, and we have a mandate to promote the city on the international stage.
We have much to look forward to. Rapid progress continues at Concourse A, which is set to open in the first quarter of 2013. The facility will ease our growth pains and will provide unparalleled levels of comfort and luxury to our customers.
From November 2012 to March 2013, we will take delivery of more than 15 aircraft. On 1st November we launched flights to Adelaide, and by end-March we will have started services to Lyon, Phuket, Warsaw and Algiers. Launching 10 new routes within a year highlights your can-do attitude and our organisational strength.
dnata has many exciting initiatives lined up: a revamped website, an engaging employee intranet, more integration between its business units and other programmes of work that support its strategy.
The group's commitment to innovation and our people will be seen in upcoming announcements on an ideas portal and an innovation lab.
Sustaining success
Emirates' strategy continues to be one of organic growth and dnata's of growth through acquisitions and diversification.
The group's profit target for this financial year ending 31st March 2013 is Dhs3.5 billion. What can we do to achieve it?
From an Emirates perspective, we need to boost our yields and profitability, which means we need to focus on filling our First and Business Class seats. To be counted among global lifestyle brands, our internal world needs to be aligned with our external brand promise. I urge our people managers to take responsibility for embedding the Hello Tomorrow philosophy within your teams. Lead by example and become the bridge that encourages a can-do spirit, creates an environment to help our people challenge conventional ways of thinking and doing business, while supporting them in their quest to exceed internal and external customers' expectations.
One dnata's success is down to each one of you. To be a truly global brand that delivers on the promises of your customers, you will need to drive deeper collaboration and wider integration across teams and business units.
As a group, we need to spend wisely to maximise benefits for our people, our customers and our brand. Be acutely conscious of costs and evaluate the returns on every dirham that we spend.
I have always said that the Emirates Group family of nearly 170 nationalities has a distinct advantage. By working together as an innovative, collaborative team, I know we can win every race and overcome any adversity.
I'm extremely pleased with the financial results and with your achievements these past six months. If we keep up the momentum, I have no doubt that we can reap rich dividends at the end of the financial year.
Ahmed bin Saeed Al Maktoum
Chairman & Chief Executive Emirates Airline & Group
The results in numbers:
Emirates
Emirates' costs rose by 15% to Dhs33.5 billion (US$9.1 billion), with fuel remaining our number one expense. We spent Dhs13.1 billion (US$3.6 billion) on fuel, which constitutes 39% of our total costs (slightly down from 41% last year). With a fleet size of 182 aircraft at the end of September 2012, which reflects an addition of 25 new aircraft since September 2011, our operating lease costs and aircraft depreciation costs have increased.
Our passenger numbers increased by 15% to 18.7 million, and seat factor rose to 80%, despite the capacity increase of 17%. Profit margin increased to 4.8% and yield remained steady. Available Seat Kilometres (ASKM) grew by 17.3% and Revenue Passenger Kilometres (RPKM) was up by 17.8%. Cargo volumes increased by 16% to 1,027 thousand tonnes.
Emirates' cash balance stands at Dhs13.2 billion (US$3.6 billion) as of the end of September - down from Dhs15.6 billion (US$4.2 billion) at the end of March 2012 - mainly because we kept our commitment and repaid a Dhs2 billion Sukuk bond in June.
dnata
dnata's operating costs grew by 11% to Dhs3.4 billion (US$940 million), compared with Dhs3.1 billion (US$850 million) last year. While the profit margin fell from 11.9% to 10.5%, dnata's cash balance remains strong at Dhs2 billion (US$551 million), and is nearly unchanged compared to March.
dnata's ground handling operation's revenue increased by 4% to Dhs1.2 (US$324 million) and it handled 130,684 aircraft, an increase of 5.6%; cargo handled 791,151 tonnes, an increase of 5%, and earned revenues of Dhs525 million (US$143 million); and catering provided 27.5 million meals, a slight decrease of 2.4%, and earned revenues of Dhs1.4 billion (US$377 million).
