The Emirates Group has reported its 21st consecutive year of net profit for its 2008-09 financial year despite unprecedented challenges in the airline and travel industry.

The Group's net profit of US $406 million for its financial year, which concluded on March 31st, 2009, was down 72% from the previous year's record profits of US $1.45 billion, showing the impact of the record fuel prices in the first six months of the year, and the impact of the global recession.

In conjunction, Group revenues of US $12.6 billion, represented an increase of 10.4% over the previous year's US $11.4 billion, reflecting continued business growth.

The Group also retained a healthy cash balance of US $2.4 billion compared with US $3.8 billion the previous year. This position is a result of funding new aircraft orders, new construction projects and staff accommodation, dividends paid to the company's owners, and massive product and service investments.

In 2008-09, the Group estimates a total contribution of US $16 billion to the UAE economy.

Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates airline and Group said: 'We have returned our 21st consecutive year of net profit, and although it is a 72% decrease on the previous year's all-time record profit, under the circumstances, this is a satisfactory result.'

The Group's performance this year demonstrates its flexibility in a challenging economic period, and its ability to strategically grow its business and customer demand. During the year, the company strengthened its operations with investments in technology, new products and customer service, while keeping a tight rein on costs.

Within the first six months of the past year, fuel posted record prices with oil rising to US $147 a barrel, there was a decrease in demand from the weakened global economy, followed by declining yields with the strengthening US Dollar against major currencies, which all contributed to lower profitability and lower net margin for the Group - 3.3%, compared to 13.2% in the previous year.

Fuel costs remained the top expenditure for the 5th year running, accounting for an unprecedented 36.2% of airline operating costs compared with 32.9% the previous year.

Sheikh Ahmed commented: 'No one could have predicted the scale of the worldwide recession. Emirates has worked hard to cope with this downturn by maintaining our agility and responsiveness in a volatile economic environment.

'We have met these challenges with determination, improved efficiencies and innovative market-leading initiatives. In 2008-09 financial year, our group achieved two significant milestones: the delivery of the first A380 heralding a new era in our eco-efficient aircraft fleet with Dnata playing a significant role in developing the ground handling processes to manage this pioneering aircraft; and the smooth opening of the state-of-the-art Terminal 3 at Dubai International Airport - a remarkable new facility dedicated to Emirates operations, with Dnata overseeing the ramp operations...'

He added: 'As we move into the new financial year, the outlook is not improving. Although fuel prices are dropping, demand for business and first class traffic is still weak in many markets. Without downplaying the global economic situation and its challenges for our business, I still believe that the coming year will be one of satisfactory growth for the Emirates Group.

'Our development plans remain unchanged. We have weathered the last 12 months with satisfactory growth, maintained the quality of our award-winning service, and maintained staff numbers in the face of an unsettled future. We will continue to forge ahead to build the airline, Dnata and the many subsidiary companies that are part of the Emirates Group.'

Sheikh Ahmed also reinforced the airline's plans to take delivery of 18 new aircraft in the coming year, saying: 'We will progress with our fleet and route expansion plans. With our strong business fundamentals and track record, we have had no problems securing financing for o