March Conflict Dents Emirates’ Record Year

Despite a turbulent month of March, Emirates Group has produced a record-high profit in its financial year 2025-2026 that ended on March 31. The Dubai-based company reported a profit before tax of AED 24.4 billion ($6.6 billion) for Emirates Airline and dnata, up 7.1 percent year-over-year. Profit after tax is AED 21.1 billion. President Sir Tim Clark indicated late last month that Emirates’ results had exceeded previous years, despite the effects of the Middle East war. In a media statement, Chairman Sheikh Ahmed bin Saeed Al Maktoum, says: “For the first 11 months of 2025-26, the picture across the Group was very positive. Strong demand for our products and services was driving revenue, and we were achieving healthy margins thanks to our sustained investments in product, people, technology and brand. Month after month, we were surpassing our targets.” This came to an abrupt standstill on February 28, and in particular on March 1 and 2, when the UAE airspace was closed, and Emirates had to suspend most of its flights for a few days. At the end of March, capacity had recovered to 58 percent. Since then, the airline has recovered to 75 percent and is operating on 96 percent of the network, it said earlier this week. Record results Looking closer at Emirates Airline now, the carrier grew revenues by 2.3 percent to AED 130.9 billion. Of these, AED 106.4 billion came from 53.2 million passengers. Ancillary revenues were AED 8.4 billion, up 17 percent yoy, mainly due to the Skywards loyalty program that celebrated 25 years. This makes FY25-26 the fourth consecutive year of record results. Total passenger and cargo capacity was up by just one percent to 60.6 billion ATKM as the airline applied a disciplined and demand-led approach to capacity. Passengers carried were down by 0.9 percent to 53.2 million at a 64.9 percent seat factor, which reflects the “extremely challenging” situation in March. Emirates doesn’t specify the financial effect of the March crisis. [caption id="attachment_192148" align="aligncenter" width="798"] Emirates statistics FY25-26[/caption] SkyCargo carried 2.5 percent more freight to 2.4 million tonnes, but revenues were almost flat at AED 16.2 billion. Cargo volumes saw solid growth, but Emirates says that the revenue environment “proved more challenging - yields came under pressure as expanded industry capacity weighed on pricing in certain markets, while lingering tariff-related concerns softened demand in select segments, further constraining revenue growth.” Operating costs were up by two percent. Fuel accounted for 29 percent of all costs at AED 31.2 billion but was down four percent year-over-year. The operating profit was up by 2.4 percent to AED 22.7 billion, translating into a profit margin of 17.4 percent. Profit before tax was up by 7.5 percent to AED 22.8 billion, and profit after tax by 3.1 percent to AED 19.7 billion. Emirates bolstered its cash position by 10.4 percent to AED 54.9 billion. Emirates invested heavily last year in cabin upgrades on the existing Airbus A380 and Boeing 777-300ER fleet. Until now, 91 aircraft have been completed, but the airline committed to another 111 as part of a $5.0 billion investment. This not only included the retrofit with Premium Economy, new Business Class seats and revamped Economy seats, but also the introduction of Starlink satellite communication on 232 aircraft. By the end of March, 21 777s had received Starlink, while the first A380 followed in April. As announced in November at the Dubai Airshow, Emirates was granted Design Organisation Approval (DOA) certification from the UAE General Civil Aviation Authority. This allows it to undertake major cabin modifications under its own authority, making it less dependent on third parties and significantly reducing lead times and costs. Emirates also signed an MoU with Safran Seats to establish a facility at Dubai World Central for manufacturing Business and Economy seats. Fleet The carrier grew the fleet by 15 Airbus A350-900s and five Boeing 777Fs. It also bought 29 A380s and five 777-300ERs that came out of lease. Emirates raised AED 10 billion to finance its short-term fleet plans. During the year, the airline ordered another 65 Boeing 777-9s and eight more A350-900s, which brings the backlog to 367 aircraft for delivery through 2038. Emirates expects the first 777-9 in Q2 of 2027. It will feature “industry-leading onboard products to support the evolving needs and preferences of our customers.” [caption id="attachment_192149" align="aligncenter" width="688"] Emirates aircraft orders FY25-26[/caption] The order for 20 Boeing 787-8s and 15 -10s is still listed as “future deliveries”, but Emirates still hasn’t confirmed if it really wants the Dreamliners. COO Adel Al Redha said last November that his airline will have to make up its mind in the near future, as Boeing wants certainty about what to do with the production slots. Ground handler, caterer and service provider dnata grew revenues by 11.6 percent to AED 23.6 billion. This was driven by increased activity, particularly in Australia, Europe, the UAE, UK, and US. Operating profit was down by one percent to AED 1.4 billion, and profit after tax by 3.7 percent to AED 1.3 billion. This is mainly caused by a higher tax rate in the UAE. Confident Without a final agreement to end the war in Iran, the situation in the Gulf region remains uncertain. Earlier this week, the UAE said that it had been targeted by Iranian drones and missiles, something denied by the Tehran authorities. This situation makes it difficult to predict Emirates’ FY26-27, but Sheikh Ahmed remains confident. “Right now, military activities between the US, Israel and Iran are paused under a ceasefire agreement. We hope for a clear resolution to the hostilities soon, and a return to market stability. But in the meantime, we are not sitting on our hands.” “From a fuel perspective, Emirates is well-hedged until 2028-29; and we have worked with our suppliers to secure the volumes required to support our current operations and our scaling up to pre-disruption levels. At dnata and across the Group, our business streams, scale, portfolio mix, and years of investments give us the resilience and agility to address any near-term challenges.” “Our fundamentals are strong. The Emirates Group’s proven business model is unchanged. Dubai’s place at the nexus of global commerce, trade and travel flows is unchanged. Our ambition to be the best in the world, and to be of service to the world, is unchanged.”

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