Dubai’s Emirates Airline reported a 48.7 percent rise in annual net profit on Wednesday, citing growth in tourism and business travel through its Dubai hub, heavy investment in its fleet and a non-union workforce. Net profit rose to 2.34 billion dirhams ($637 million) for the year to end-March, while total revenue increased 36 percent to 18.113 billion dirhams. Founded in 1985 with just two aircraft, the airline is in the middle of an expansion drive that will see it taking delivery of a new plane once a month for the next seven years. It added nine aircraft in 2004-2005, taking the fleet to 75 at the end of the year.

Sheikh Ahmed bin Saeed al-Maktoum, chairman of Emirates Group which owns the unlisted carrier, said the airline benefited from having its base at the region’s busiest airport, Dubai International. Passenger numbers increased 20 percent to 12.5 million, he said. Higher fuel costs dented profits, however, and will continue to pose a challenge during the current financial year, he said. “Had fuel prices stayed at the levels they were two years ago, we could have made even higher profits,” Sheikh Ahmed said. The airline’s total costs increased 35 percent to 15.678 billion dirhams, driven mainly by a doubling in fuel costs, to 3.279 billion dirhams. Fuel accounted for 21 percent of costs in 2004-05, up from 14 percent the previous year.

Sheikh Ahmed said Emirates had conducted a study about listing the company on a stock exchange but that there were no firm plans yet to take the company public. He denied that Emirates Group received any subsidies from its owner, the government of Dubai, a trading hub in the oil-rich United Arab Emirates. Emirates Group, which also owns a company that provides airport and other services, posted net profit of 2.6 billion dirhams, up 49 percent from the year-ago period.

Sheikh Ahmed declined to give any new details of planned aircraft purchases but said Emirates was reviewing a range of aircraft from both Boeing Co and Airbus. He said that the airline’s operating margins improved over the year. Its seat load factor rose to 74.6 percent, from 73.4 percent. Yield also improved, with revenue per tonne kilometre at $ 0.52, up from $ 0.49 a year ago. The absence of labour unions in the UAE also helps Emirates outperform some rivals in Europe and the United States, Sheikh Ahmed said. “It is not the unions who control the airline, but the management and the director at the top,” he said. “Since we started the airline in 1985, our competitors seem to find it incomprehensible that we can make profits by having a skilful team, being a market leader and investing heavily in new equipment – surely the criteria for any successful company?”