Emirates SkyCargo profits rocket despite lean year
Emirates SkyCargo has recorded bumper profits for 2007/2008 despite what it described as a very turbulent year for the airfreight industry. Revenue rose to US$1.8 billion, an increase of 20%, while overall tonnage increased 10.9% to 1,282,134 tonnes.
Furthermore, cargo recorded 19% contribution to total transport revenue, a figure that Emirates SkyCargo has claimed is one of the highest contributions to any airline with a similar-sized fleet.
The operator cited "global socio-economic conditions", including the US slowdown with the sub-prime crisis, together with the fluctuating values of the dollar, sterling and euro as having an impact on the industry, and also highlighted the rising cost of fuel as having an effect on its bottom line.
It also noted that global weather changes had affected agriculture and fisheries in several key areas, a problem that had been compounded by political instability in a number of states.
However, whereas other airlines have fared less well for the same reasons, Emirates and its cargo subsidiary have definitely bucked the trend, a point that was crowned with the Best Middle East Cargo Airline of the Year award for the twentieth consecutive time at a ceremony in London last month.
The Emirates Group as a whole recorded revenue of $11.2 billion, while net profit came in at $1.37 billion. Alongside the record profit margins, Emirates SkyCargo also opened up new freighter-only routes to Djibouti, Hahn (Germany), Toledo (US) and Zaragoza (Spain).
Furthermore, the carrier relocated to a new Cargo Mega Terminal (CMT) in February, based in Dubai Cargo Village, which has an annual throughput capacity in excess of 1.2 million tonnes.
"Previously, we were pushing more than one million tonnes of cargo through a 350,000-tonne-a-year capacity facility and, as you can imagine, we were stretched to the limit," remarked Emirates' divisional senior vice-president for cargo, Ram Menen. "Already we have seen improved efficiencies which ultimately benefit our customers.
For example, the percentage of general freight ready for delivery in ATA (aircraft actual time of arrival) + 6 hours rose from a low of 79% to 82%.
The percentage of perishable freight ready for delivery in ATA + 2 hours jumped sharply from a low of 28% to 62%," he added.During the course of the year, Emirates SkyCargo reported that its Dubai hub had handled 1,047,754 tonnes, 11% up year-on-year.
With regard to its freighter fleet, the company added three new 747-400ER aircraft-one on lease and two owned-and by the end of the financial year, it's fleet consisted of 10 aircraft; five leased and five owned.
However, it is clear that SkyCargo has no intention of resting on its laurels, particularly as the year ahead looks set to be even more challenging than the previous fiscal year. So what are the factors, other than the CMT, that the operator will look towards to consolidate its revenue in the coming months?
"In December, we take delivery of our first Boeing 777 freighter," said Menen. "With its 105-tonne capacity and excellent fuel efficiency, the 777F will be by far the best twin-engine freighter the world has seen."
In addition, the operator has also flagged the new destinations it will be taking on this year, with Cape Town (started March), Kozhikode and Guangzhou (July), Los Angeles, (September), San Francisco (October) and Durban (December), all being added to its network.
"On top of these, we are increasing capacity on many of our existing routes to facilitate the growing traffic," concluded Menen.