High fuel costs and weak currencies in some key markets flattened first-half profit growth at Dubai’s flagship airline Emirates, signalling Gulf carriers are not immune to the pressures on the industry despite rising passenger numbers.

Emirates and its home base Dubai are expanding at a break-neck speed on expectations 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.

Emirates profits have surged in the last couple of years on the back of new routes and more passengers but the latest results show the airline is getting weighed down by the fuel and currency issues which have hurt other large global players.

“The challenge is increasingly hard - Emirates is now the world’s third largest airline - but as yet the wheels show no sign of coming off,” said Sudeep Ghai, managing partner at London-based consultancy Athena Aviation.

The Dubai government-owned airline, which was launched in 1985, currently flies to 137 destinations in 77 countries. It has posted a profit in every year of operation and full-year growth has slowed only twice - in 2009 and 2011.

It reported yesterday a near-flat net profit of 1.75bn dirhams ($475mn) for the six months ended September 30 compared with 1.7bn dirhams in the prior-year period, despite a 15% rise in passengers to 21.5mn.

“High fuel prices, accounting for 39% of our expenditures, and the unfavourable currency exchange environment continue to eat into our profits,” chairman and chief executive Sheikh Ahmed bin Saeed al-Maktoum said in an e-mailed statement.

The airline did not give details. But as an example, the west Asian and Indian Ocean region, dominated by India, accounted for 10.6% of its revenue last fiscal year, and the Indian rupee is down about 15% against the US dollar this year.

Emirates, along with other Gulf carriers like Qatar Airways and Etihad Airways, have pumped billions of dollars into expanding its fleet and routes, while recession-hit European airlines cut costs and shelve growth plans.

Last month, German flag carrier Lufthansa warned that weakness in Asian currencies would weigh on revenue growth at its passenger airline business this year while a grindingly slow market recovery was set to dent profit at its cargo unit.

Other European airlines such as Ryanair and Finnair have trimmed profit expectations, citing lower demand and the impact of volatile exchange rates, while Air France-KLM said the sharp rise in the euro against the dollar had weighed on quarterly revenue.

Emirates, meanwhile, is expanding. It is the world’s largest customer of Airbus’s A380 superjumbo and is set to increase its fleet further with a big order for Boeing’s revamped 777X jet at the Dubai Air Show next week.

Other Gulf carriers are also slated for big plane orders at the largest regional aviation event, as they flex their muscles in the global aviation industry.

Middle Eastern airlines are expected to contribute nearly 13% in 2014 to the forecasted global industry net profit of $16.4bn, the highest ever for the region, aviation group Iata said in its latest report.

Omantel

Oman Telecommunications (Omantel) reported a 3.9% rise in third-quarter profit yesterday, beating analyst estimates as broadband revenue increased.

The former monopoly made a net profit of 29.1mn rials ($75.58mn) in the three months to September 30, up from 28mn rials in the year-earlier period, the company said in a statement.

Analysts polled by Reuters on average forecast Omantel would make a quarterly profit of 27.8mn rials.

Third-quarter revenue was 112.3mn rials. This compares with 108.4mn rials a year ago.

For the first nine months of 2013, Omantel’s mobile broadband subscriber base increased by 49% from a year earlier as revenue from this segment rose 64%.

Fixed broadband subscribers increased by 33% over the same period, leading to a 35% revenue rise from these customers.

Domestically, Omantel competes with Nawras, a unit of Qatar’s Ooredoo.

Omantel also hosts two mobile virtual network operators (MVNOs), Friendi and Renna. Including these firms’ subscribers, Omantel had a 59% share of Oman’s mobile sector. Omantel also owns a controlling stake in Pakistan’s Worldcall.