May 9, 2013 / 12:36 PM / 6 years ago

UPDATE 2-Emirates' 2012 profit surges amid expansion push

* 2012 profit 2.3 bln dirhams vs 1.5 bln dirhams yr-ago

* Full-year revenue 73.1 bln dirhams, up 17 pct

* Fuel costs up 15 pct in 2012 over previous year (Recasts and updates with detail, comment)

DUBAI, May 9 (Reuters) - Dubai’s Emirates airline defied aviation gloom by lifting 2012 net profit by over a half, reaping the benefit of enhancing its fleet and attracting extra passengers through its home hub in the Gulf.

Like other state-backed Gulf carriers Etihad Airways and Qatar Airways, Emirates has increased market share through organic growth, as well as partnerships and equity purchases.

In contrast, competitors in Europe are cutting costs and pulling back on expansion plans amid a global market slowdown and rising fuel costs.

“(The results) reflects a clear strategy of focusing on key growth markets and deploying the fire power of state of the art Boeing 777-300’s and Airbus A380’s with maximum care and precision,” said John Strickland, director of UK-based JLS Consulting.

Emirates and its home base Dubai are betting that its location - a third of the world’s population is within a 4-hour flight radius - will continue to attract passenger traffic away from other global hubs such as London, New York and Singapore.

It entered a 10-year alliance with Qantas Airways in September, which resulted in Qantas switching its hub to Dubai from Singapore for European flights.

With the largest fleet of the Airbus A380 superjumbos, the Gulf carrier is attracting more long haul travellers.

Meanwhile Etihad, the Abu Dhabi-based fast-expanding carrier, took a 24 percent stake in India’s Jet Airways in April for $379 million and also took stakes in Air Berlin, Aer Lingus, Virgin Australia and Air Seychelles last year.

CAPACITY INCREASE

Emirates boosted profit to 2.3 billion dirhams ($622 million), up 52 percent compared with 2011.

The profit rise was in sharp contrast to the first-quarter operating loss at Franco-Dutch airline Air France-KLM and a bigger than expected loss at Germany’s Lufthansa .

Emirates, which is the world’s largest customer for the Airbus A380, said in a statement on Sunday that it had taken delivery of another 34 jets, including 10 superjumbos and 24 Boeing 777-300ERs.

“Our strategy for growth has reaped high benefits this past financial year, which has been our strongest ever in relationship to capacity growth,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman of Emirates.

The Gulf airline said profit for the wider Emirates Group was 3.1 billion dirhams, including airline services arm, Dnata.

Its fuel bill increased by 15 percent over last year to 27.9 billion dirhams.

The airline, which launched in 1985, flies to 133 destinations and carried 39 million passengers last year. (Reporting by Praveen Menon; Editing by Dinesh Nair and David Cowell)

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