Emirates remains profitable despite Gulf conflict and soaring fuel costs

Emirates Group remained profitable in the first half of its 2026–27 financial year, despite a sharp deterioration in earnings caused by disruption from the conflict in the Gulf and a substantial increase in aviation fuel prices, according to results published by the company on Thursday. The Dubai-based group reported pre-tax profits of AED 4.1 billion (€approximately €1.03 billion; US$1.1 billion) for the six months to September 30, 2026, down 66 per cent from the same period a year earlier. Group revenue fell by 12 per cent to AED 66.2 billion (US$18 billion), compared with AED 75.4 billion (US$20.6 billion) in the corresponding period of 2025. Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 41 per cent to AED 12.5 billion (US$3.4 billion), from AED 21.1 billion (US$5.7 billion), while net profit after tax also dropped by 66 per cent to AED 3.6 billion (US$1 billion). Despite the weaker performance, the group maintained a substantial cash position of AED 54.1 billion (US$14.7 billion) at September 30, compared with AED 59.6 billion (US$16.2 billion) at the end of March. Emirates said its available cash enabled it to meet operational requirements, make advance payments for new aircraft deliveries and service existing debt obligations. It also paid the remaining AED 2 billion (US$545 million) dividend to its owner, the Investment Corporation of Dubai (ICD), completing the AED 3.5 billion (US$953 million) distribution approved for the 2025–26 financial year. Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive of Emirates Airline and the Emirates Group, described the six-month period as challenging but said the group’s business model and employees had helped it withstand the disruption. “Despite unprecedented regional challenges and high fuel prices, the group recorded pre-tax profits of AED 4.1 billion (US$1.1 billion),” he said. He added that sustained demand and a strong contribution from cargo operations had helped maintain revenue and cash reserves at healthy levels, despite global jet fuel prices doubling compared with the previous year. Al Maktoum thanked the UAE government for its response and coordination, which he said had enabled the safe resumption of air transport following military operations in the Gulf region and the easing of travel advisories affecting journeys to and through the UAE. He said Emirates and dnata were continuing to invest in fleet expansion, product and service improvements and new capabilities to strengthen the group’s competitiveness and resilience. “We enter the second half of the 2026–27 financial year with cautious optimism,” he said, adding that the group would continue monitoring costs and geopolitical developments while prioritising safety, quality and customer satisfaction. The group’s workforce declined by 2 per cent compared with March 31, reaching 128,237 employees at the end of September. However, both Emirates and dnata continued recruitment programmes to meet their operational requirements. Emirates Airline Emirates recorded pre-tax profits of AED 3.7 billion (US$1 billion) during the first half, down 68 per cent from AED 11.4 billion (US$3.1 billion) a year earlier. Its net profit after tax fell by 66 per cent to AED 3.3 billion (US$903 million), while revenue, including other operating income, declined by 13 per cent to AED 56.9 billion (US$15.5 billion) from AED 65.6 billion (US$17.9 billion). The airline said its operations had been affected by airspace restrictions and closures across the region, while government travel advisories also influenced passenger movements and travel decisions. It concentrated on restoring its network and connectivity through Dubai, operating 91 per cent of its pre-disruption network by September 30. The airline was serving passengers and cargo across 150 airports in 78 countries and territories by that date. To maintain customer confidence, Emirates introduced comprehensive travel coverage without restrictions linked to government travel advisories, free date changes for existing tickets and flexible refunds. Between April 1 and September 30, the airline expanded the availability of its Premium Economy cabin and introduced its latest cabin products in additional markets. It received nine new Airbus A350 aircraft and completed full cabin refurbishments on 12 aircraft, comprising nine A380s and three Boeing 777s. The wider aircraft refurbishment programme, one of the largest globally, represents a planned investment exceeding US$7 billion, aimed at introducing Emirates’ latest cabin products throughout its fleet. The airline also accelerated its Starlink installation programme, equipping another 36 aircraft with high-speed Wi-Fi during the six-month period. This brought the total number of Emirates aircraft fitted with Starlink to 57 by September 30. In May, Emirates began construction of a new engineering and maintenance, repair and overhaul (MRO) facility at Al Maktoum International Airport. The project represents an investment of US$5.1 billion, with completion expected in the middle of the 2030s, and is intended to support the airline’s future fleet requirements. Despite the difficult operating environment, Emirates introduced two new cabin products, including its U-Dream headrest integrated into Economy Class seats and electronically operated privacy dividers in Premium Economy. The airline said the additions were intended to improve passenger comfort and privacy in both cabin classes. On the ground, Emirates opened its first lounges under a new design concept in Munich, Frankfurt and Manchester, offering updated facilities and services for premium passengers and frequent travellers. It also opened additional travel stores, taking its retail network to more than 30 locations and expanding opportunities for customers to access more personalised, experience-led services. The airline continued its accessibility initiatives through its Travel Rehearsals programme, which was extended to 15 additional destinations in the United Kingdom, Australia, Portugal, the Philippines, Madagascar and the Maldives. The programme now operates at 47 locations and supports young travellers with autism and their families by familiarising them with the airport and flying experience through realistic simulations designed to reduce travel anxiety. Emirates also reported a series of community initiatives during the period. These included reopening a refurbished community tennis court in Miami through its Force for Good partnership with the USTA Foundation, upgrading a technology and gaming space for young people in New York through NBA Cares, and creating a natural play area through its Championing Nature partnership with Wimbledon and the London Wildlife Trust. It also launched the Emirates Nourishment Programme in partnership with EPCR and the Kolisi Foundation, aiming to provide 400,000 breakfasts annually to children from vulnerable communities in South Africa. Its sponsorship agreements with Arsenal Football Club and Real Madrid were extended until 2033 and 2031 respectively. In operational terms, Emirates’ overall capacity declined by 10 per cent to 28.2 billion available tonne kilometres (ATKM) during the first half, reflecting its reduced flight schedule. Passenger capacity, measured in available seat kilometres (ASKM), fell by 17 per cent, while passenger traffic, measured in revenue passenger kilometres (RPKM), declined by 25 per cent. The average passenger seat load factor dropped to 72 per cent, compared with 79.5 per cent in the same period last year. The airline carried 21.8 million passengers, down 22 per cent year-on-year. Its cargo division, Emirates SkyCargo, transported 1.2 million tonnes during the six months, a marginal decline of 1 per cent. However, cargo revenue increased by 52 per cent, as the regional conflict reduced available air freight capacity and disruption to maritime shipping encouraged more businesses to seek air cargo alternatives. SkyCargo expanded its fleet with the delivery of five new Boeing 777 freighters and the introduction of its first aircraft converted from passenger to cargo operations. Its network was extended to two additional destinations, Almaty and Zhengzhou, while dedicated freighter services were introduced to more than 15 existing Emirates destinations. Flight frequencies were also increased in several important markets, including the Far East. The airline’s operating costs, including fuel, declined by 2 per cent in line with its lower level of activity. However, despite a 12 per cent reduction in fuel consumption, fuel expenditure before hedging gains increased by 60 per cent compared with the previous six-month period. Emirates said gains of AED 7.1 billion from its fuel price risk management strategy substantially offset the impact of higher prices, limiting the net increase in fuel costs to 13 per cent. Fuel nevertheless remained the airline’s largest operating expense, accounting for 34 per cent of total operating costs. Emirates’ EBITDA stood at AED 11.5 billion (US$3.1 billion), down 41 per cent from AED 19.7 billion (US$5.4 billion) a year earlier. Elsewhere within the airline’s business, Emirates Flight Catering recorded a 51 per cent decline in revenue from external customers to AED 273 million (US$74 million). It supplied 4.5 million airline meals, down 41 per cent, reflecting reduced air traffic at Dubai airport during the period. Emirates Leisure Retail and MMI reported a 13 per cent decrease in revenue to AED 1.2 billion, attributed to lower tourist traffic in the UAE during the first half. Services subsidiary The group’s aviation services subsidiary, dnata, recorded pre-tax profits of AED 410 million (US$112 million), down 51 per cent from the corresponding period last year. Revenue, including other operating income, declined by 7 per cent to AED 11 billion (US$3 billion), compared with AED 11.7 billion (US$3.2 billion). Net profit after tax fell by 56 per cent to AED 309 million (US$84 million), while EBITDA declined by 31 per cent to AED 939 million (US$256 million), from AED 1.4 billion (US$372 million). The company said its ground handling, catering and retail and travel services divisions had adapted quickly to the regional conflict. Its international operations helped offset the effects of lower aviation and travel activity in the UAE and the wider Gulf. During the first half, dnata secured several multi-year agreements, including a cargo handling contract with Silk Way Group in Singapore and an in-flight catering agreement with Cathay Pacific covering several airports in the United Kingdom and the United States. It also secured a seven-year ground handling licence at Amsterdam Schiphol Airport, strengthening its European presence. To expand its capabilities, dnata opened a new integrated cargo control centre in Dubai and committed AED 8 million to expanding The Fort – Lisaili, the Dubai desert tourism destination operated by Arabian Adventures. Its technology investments included automated aircraft docking systems in Dubai, an aircraft catering simulator in Dublin and trials of autonomous towing vehicles in Europe and Asia. The company also announced an investment of A$32 million in a new cargo facility at Western Sydney International Airport. Construction of its new catering facilities at the airport was progressing according to schedule, with operations expected to begin in 2027. As part of its wider cargo and logistics strategy, dnata opened a logistics facility worth AED 100 million (US$27 million) at Dubai South. It also advanced plans for a AED 37 million investment in Alat, Azerbaijan, alongside new and expanded cargo operations at East Midlands and Zurich airports. In its travel services division, dnata consolidated the operations of Imagine Cruising and Travelbag, bringing together their complementary portfolios to achieve greater scale, share expertise and support international growth. The company’s airport operations remained its largest revenue contributor, generating AED 5.4 billion (US$1.5 billion), down 3 per cent year-on-year. Growth in international operations helped offset reduced activity among airline customers at its UAE hub. Across dnata’s operations, the number of flights handled fell by 8 per cent to 414,012, while cargo volumes declined by 6 per cent to 1.49 million tonnes. Its catering and retail division generated AED 4.2 billion (US$1.1 billion), an increase of 1 per cent, supported by growth in in-flight retail operations, particularly through partnerships with easyJet and Aer Lingus. The total number of meals provided fell by 10 per cent to 54 million, mainly because of the loss of major contracts in its UK operations. The travel services division contributed AED 1.4 billion (US$373 million) in revenue, down 31 per cent from AED 2 billion (US$538 million) a year earlier. The decline was mainly attributed to dnata’s divestment from UK travel businesses Travel Republic and Netflights, which stopped accepting new bookings from November 2025. The division’s total transaction value (TTV) fell by 22 per cent to AED 3.8 billion (US$1 billion), compared with AED 5 billion (US$1.4 billion) in the corresponding period last year. Cyprus market Emirates’ presence in the Cyprus market dates back to 1994, meaning the airline has been operating on the island for 32 years. During that time, it has served more than 2.1 million passengers in Cyprus.