The Dubai-based company will halt dividend payments to its government shareholder for the first time in at least a decade while stepping up savings efforts after net income tumbled 70% to 2.5 billion dirhams (€626.5m) in the 12 months to the end of March.
The earnings slump comes as Emirates grapples with some of the toughest operating conditions in a 30-year history that’s seen it become an industry heavyweight by exploiting the position of the Gulf as a natural crossroads for inter-continental flights. Adding to the carrier’s woes are a stronger dollar, concerns about the Brexit vote and Europe’s immigration crisis, and President Trump’s laptops ban on US-bound trips from airports including Dubai.
Emirates’ revenue fell 0.4% on routes to Europe, its biggest market, with a 4% decline from once fast-growing African services. Americas sales expanded most - highlighting the potential impact of the curbs on carrying electronic devices, which were announced in March.
Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum said he expects the year ahead to remain challenging, with “hyper-competition” squeezing yields, a measure of fares, and “volatility in many markets impacting demand.”
The failure to pay a dividend also comes as a blow for the airline, which is central to the UAE’s bid to diversify away from an oil-based economy and appeared to have become a reliable income source.