Emirates grows cargo volumes despite difficult market

The air cargo market is currently in a depressed state as weak demand has led the largest carriers to shrink their fleets, yet Emirates SkyCargo does not appear to have been afflicted by this trend. The Gulf based airline’s freight business saw a rise of 16% in volume to achieve 2.1m tonnes over 2012.

Revenue, however, increased by only 8%, to AED10.35bn (US$2.8bn/€2.2bn) a fall in yield freight tonne kilometres of 6%. Cargo represented around 15% of Emirates total revenue of AED71.16bn (US$19bn/€14.8bn) for the financial year 2012. 

The company has not broken-out profit figures for the Emirates Cargo business, however it appears that profitability may have fallen over 2012. Capacity increased substantially during the year and therefore the break-even load factor edged-up to 66.9%, whilst the overall load factor was 67.5%; although these ratios appear to apply to both passenger as well as cargo traffic.

The cargo handling division of the ground services business, dnata, also saw substantial growth. Revenue climbed by 7% to AED1.1bn, driven by logistics operations at Dubai World Central and Dubai International Airports. 

It is interesting how Emirates has managed to grow its business profitably, whilst others have suffered losses. For although the buoyant Middle-East accounts for 10% of its business by revenue, the not so buoyant East Asia air freight market is the source of one third of its revenue. The company said that it saw growth in all of the major geographies including an 18% increase in Europe, a 14% increase in East Asia and the Americas up 23%. This expansion was, in great part, attributed to new capacity and destinations
added during the year.

Overall, Emirates Group increased revenue by 15.7% and reported an operating profit of AED2.84bn (US$772m/€593m), a margin of 3.9% was helped by strong passenger demand and a continuing expansion of its fleet. 

Note: AED= €0.21/US$0.27