Emirates Profit Slumps to Seven-Year Low as Oil Erodes Margins - Bloomberg

Emirates Profit Slumps to Seven-Year Low as Oil Erodes Margins - Bloomberg:

Emirates Group, owner of the world’s biggest long-haul airline, suffered a 44 percent decline in annual earnings as higher oil prices and a stronger dollar hit margins at a time when its business model faces increasing competition.

Net income shrank to 2.32 billion dirhams ($632 million) in the 12 months through March, the lowest level since fiscal 2012, according to a statement Thursday from Dubai-based Emirates. Seat-occupancy levels also fell and the company reduced dividend payments to its state owner by 75 percent.

While all earnings are affected by the price of crude, the Persian Gulf giant is particularly sensitive to fluctuations. Too high and rising fuel costs become difficult to manage, too low and demand for travel falls in the region’s oil-based economies. The carrier said last week that the sweet spot is between $50 to $60 a barrel, compared with the current level of about $70.