DUBAI, United Arab Emirates (AP) — The Middle East’s biggest airline, Emirates, said on Thursday tha profits were down almost 70% in the past fiscal year, reaching lows of $237 million, compared to last year’s whopping $762 million.
The Dubai-based airline’s parent company Emirates Group also posted lower profits at $631 million, down 44% from last year.
Despite the dip in profits, revenue reached record highs of nearly $30 billion for Emirates Group. Revenue for the airline was slightly up at $26.7 billion.
The company said operating costs had increased substantially as it footed its biggest-ever fuel bill at more than $8 billion on the back of oil prices that climbed 25% higher over the last year.
The company said a strengthened U.S. dollar, lower airfreight demand and weakened travel demand also contributed to eroded 2018-19 earnings.
Emirates Airline and Group chairman and chief executive, Sheikh Ahmed bin Saeed Al Maktoum, acknowledged in a statement that the past fiscal year “has been tough, and our performance was not as strong as we would have liked.”
The company released its earnings in a statement, saying it invested about $4 billion in new aircraft and equipment, the acquisition of companies and other initiatives compared to the previous year’s $2.5 billion in similar spending.
Among the major purchases was a commitment for 70 new Airbus planes worth $21.4 billion at list prices to be delivered over the next five years. The company also made slight increases in its total workforce, employing a total of about 105,300 people.
Emirates Group additionally operates the global dnata — or Dubai National Air Transport Association — ground and travel services provider. That division of the company had revenues of close to $4 billion and profits of $394 million.
“It’s hard to predict the year ahead, but both Emirates and dnata are well positioned to navigate speed bumps, as well as to compete and succeed in the global marketplace,” Al Maktoum said in a statement.
Al Maktoum is also chairman of budget carrier flydubai, which has a codeshare agreement with Emirates. While the two airlines operate independently, both are owned by the state-owned Investment Corporation of Dubai.
Emirates Group said it declared a dividend of $136 million to the Investment Corporation of Dubai from its latest fiscal year earnings.
The aviation, travel, tourism and leisure industries are key pillars of Dubai’s economy, which has seen a slowed down pace of growth, declines in real estate prices and companies cutting costs either by firing employees or freezing hiring as non-oil businesses struggle with delays in payments down the supply chain.
Emirates airline’s aggressive expansion and growth has helped transform its hub at Dubai International Airport into the world’s busiest for international passengers. The airline said it carried 58.6 million passengers this past year, nearly the same as the year before.