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Emirates sees profit dented

Emirates Group first-half profit plunged 64 percent as the world’s biggest airline by international traffic struggled with a rising U.S. dollar and political and economic uncertainty that damped global travel and weighed on fares.

Net income fell to 1.3 billion dirhams ($364 million) in the six months through September from 3.7 billion dirhams a year earlier, the Dubai-based carrier said Wednesday in a statement. Revenue rose 1 percent to 46.5 billion dirhams.

“The bleak global economic outlook appears to be the new norm, with no immediate resolution in sight,” Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum said in the statement. “We continue to make strategic investments, because we know we have to work even harder for every customer.”

 Emirates, which has exploited its Persian Gulf location to turn its Dubai hub into an inter-continental crossroads, has faced a tough year. Low petroleum prices have sapped demand for lucrative premium bookings from executives in the oil and gas industry, while terrorist attacks in Europe have scared off travelers from Asia. The dollar’s exchange-rate gains held back revenue growth, which Emirates also said was hurt by currency restrictions in some African countries.

Cash at the group dwindled to 14.9 billion dirhams by Sept. 30 from 23.5 billion dirhams on March 31 as the company invested in new aircraft, among other payments. Emirates took delivery of eight Airbus Group SE double-decker A380 planes and eight Boeing Co. 777s, and 20 more wide-bodies will join the fleet by the end of the fiscal year.

“What will happen with the oil price movement in the next six months will be very important,” said Diogenis Papiomytis, director of aerospace and defense at consulting company Frost and Sullivan. Donald Trump’s victory in the U.S. presidential election “might mean a weaker U.S. dollar in the next six months, so that might have a positive effect. However, with the new president, there’s a lot of uncertainty in the market and this may affect trade traffic.”.-Bloomberg