Emirates reports higher profits, despite slower cargo growth

This week, Emirates Group released financial results for the fiscal year ended March 31, 2018, reporting an eye-catching increase in overall net profit of 67 percent to US$1.1 billion. However, the cargo arm of its business, Emirates SkyCargo, reported slowing growth, with tonnage carried increasing by 1.8 percent to 2.6 million tonnes in FY2017, which is about 1 percentage point less than the year prior, in which it reported a 2.7 percent increase in tonnage carried, year-over-year. Revenue accrued from the cargo division of business amounted to about US$3.4 billion, comprising 14.3 percent of the company’s total revenue.

FY2017 cargo traffic was up about 3.5 percent, y-o-y, to 13.4 billion freight tonne kilometers (FTKs), falling below the international average traffic growth of 10 percent in 2017 – which is still a decent improvement, considering the double-digit growth the carrier has sustained for years. The company improved its capacity utilization, increasing its load factor from 65 percent in FY2016 to 67 percent in its most recent report.

Over the year, the company has invested in infrastructure and warehousing facilities in London, Amsterdam and Adelaide, Australia, and enhanced its efforts in perishables. A year ago in April, the carrier launched Emirates Fresh, the perishable-specific branch of its cargo sector, which employs cool-chain infrastructure for the transportation of perishables, including fresh fruit, vegetables and flowers.

The carrier transported 150,000 tonnes of fruit and vegetables globally in the program’s first full year, over one-fifth of which originated in India. Nearly half of the produce the carrier moved was imported into the United Arab Emirates (UAE).