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The Emirates Group has declared a 13.5 per cent increase in net profits to Dhs603 million (US$164 million) for the financial year 2001-2002, flying in the face of recent industry trends.

The annual report of the Group, which comprises Emirates Airline and Dnata, was announced at a press conference at its Dubai hub recently by Group Chairman Sheikh Ahmed bin Saeed Al Maktoum.

In his review of the year, Sheikh Ahmed said: "in a normal year, our profitable results would have been a superb achievements; in 2001-2002, it is exceptional and probably unique."

Total group revenue increased by 129 per cent to Dhs7.8 billion (US$2.1 billion) in the year ending March 31, 2002, compared with Dhs6.9 billion (US$1.9 billion) in the previous year.

Of the Group net income of Dhs603 million (US$164 million), Emirates' profits rose 11 per cent from Dhs421.8 million (US$ 115 million) Dhs 468.2 million (US$127 million). Dnata returned a net income of Dhs134.8 million (US$37 million), up from Dhs109.5 million (US$30 million) for last year.

Referring to the recent industry trends following September 11, Sheikh Ahmed commented: "This notoriously cyclical industry of ours was already at the bottom of the cycle at the beginning of September 2001. The horrors of September 11 plunged it into chaos. We were not immune."

However, the chairman pointed out that while it would have been forgivable to give up on the prognosis for another profitable year, Emirates did not. "We only briefly and marginally reduced our schedules, redoubled our efforts in our markets, severely restrained costs, and kept to our plans," he said.

"This meant lending our full support to the Government of Dubai's massive infrastructure plans to develop commerce and tourism and attract 15 million annual visitors by the year 2010 - a strategy in which we have the utmost confidence. Consequently, at the Dubai Air Show in November, we announced orders for $15 billion worth of new aircraft," added Sheikh Ahmed.

Maurice Flanagan, Emirates' Group Managing Director, Brought up an issue of concern to Emirates in his review of the year, saying that ill-informed allegations about hidden subsidies (despite publication of transparent, audited annual accounts) may affect government decisions on offering traffic rights to Emirates.

"This hits us on a vulnerable spot because we ourselves have no such protection at all," said Mr. Flanagan. "The Government of Dubai, in the promotion of Dubai's economy, sensibly maintains an Open Skies policy. We are therefore subject to unlimited foreign competition in our home market. In these circumstances, we have to be smart to survive, and I am happy to say that we do much more than survive."

A bold "business as usual" strategy, in the aftermath of September 11, by Emirates sales teams network-wide, achieved excellent sales figures in the last quarter, especially in securing business from competitors who had cancelled or suspended flights to Dubai.

Overall, airline passenger numbers grew by 18.3 per cent to 6.8 million, with seat factor down slightly from 75.1 per cent to 74.3 per cent. Available seat kilometres in increased by 19.7 per cent, with costs up by only 13.6 per cent, reflecting improved productivity.

Paradoxically, the upsurge in passenger traffic reduced available freight space in aircraft. However, Emirates SkyCargo reported an 8.7 per cent improvement in revenue, with cargo tonnage up by 19.5 per cent to 400,569 tonnes.

Emirates' network grew to 57 destinations in 40 countries with the start of operations to the Indian city of Hyderabad and Morocco's commercial capital, Casablanca, in addition to extra services to Hong Kong, Tehran and Johannesburg.

Emirates' Destination and Leisure Management division, which includes the wholesale tour operating company Emirates Holidays, the Dubai destination management company Arabian Adventures and the Al Maha Desert Resort, posted results ahead of expectations, with customer numbers reaching 170,000.

The number of scheduled airlines using the Dubai International Airport rose from 95 to 105. As the sole ground-handing agent, Dnata Airport Services was responsible for handling nearly 60,000 aircraft and taking care of more than 13.8 million passengers, a 7.9 per cent increase over last year.

Handling freight operations at the airport, Dnata Cargo registered a record 10.9 per cent increase in tonnage to 635,298 tonnes. The division also achieved an ISO9001/2000 certification, an upgrade in the original gained in 1995. 

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