Business

AMMAN — The Amman Chamber of Commerce (ACC) on Tuesday presented a study that included 24 remarks on the new Income Tax Law.

The study, revealed at an ACC meeting attended by different commercial sectors, also presented recommendations on amending some of the law items to deal with tax evasion and support the local business environment to improve its competitiveness in attracting more investments.

ACC President Issa Murad described the Law as “unfair” to the commercial sector since it increased the tax rate from 14 to 20 per cent, which will affect many economic activities, especially in terms of supply and demand.

Murad noted that the commercial sector markets 80 per cent of the local industrial products, referring to the difficult commercial status the Kingdom is going through and the decline in the net profits of companies to less than 2 per cent.

AMMAN — Participants at the 7th Jordan Afaq Economic Forum, which began on Tuesday, called for setting up a free trade zone in Amman to facilitate legal procedures for investors.

Economy and finance experts as well as representatives of companies stressed the importance of activating the economic sector through training and developing human resources and regulations that match the present circumstances, especially the regional situation.

The forum, discussing Arab economic and investment challenges and risks in light of recent events in the region, aims at contributing towards enhancing economic conditions and offering chances for the public and private sectors to meet with local and foreign investors, as well as sign economic partnerships.

On the sidelines of the forum, a number of local and international economic companies are taking part in the 10th Investment and Finance Expo and Awards.

Chief Market Strategist at ADS Securities, Nour Eldeen Al Hammoury, said boosting local economy and attracting foreign investment requires reconsidering a number of laws that regulate the economic sector, calling for establishing a free trade zone in Amman. 

Moreover, he called on stakeholders to offer simplified procedures that encourage investment in the Kingdom. 

Total Solutions Company General Manager Hani Sharif considered Amman a strategic area as it forms a link between Arab countries. He also said Amman became a global centre to hold international conferences, seminars, and meetings on various fields.

Moreover, Sharif noted that although Jordan achieved a significant progress in the economic field as well as other fields, yet some procedures and laws still form an obstacle for many investors in Jordan, like the taxes and customs.

AMMAN — Industries and hospitals topped the list of sectors where investments landed last year.

According to a study prepared by the Amman Chamber of Commerce (ACC), JD407 million flowed to the industrial sector and JD271 million to hospitals.

"A total of JD1.15 billion was directed to projects that benefited from the Investment Law in 2014, compared to JD1.92 billion in 2013," the ACC report indicated. 

Other statistics showed that the Kingdom's gross domestic product (GDP) went up by 6.6 per cent last year, reaching JD25.4 billion (JD23.8 billion in 2013). 

Consequently, GDP per capita in 2014 stood at JD3,810 (JD3,653 in 2013).

Foreign currency reserves at the Central Bank of Jordan in 2014 reached JD9.9 billion, 17.2 per cent higher than the JD8.51 billion registered in 2013,  the report said.

On trade, it added that national exports increased by 7.5 per cent reaching JD5.2 billion (JD4.81 billion) 

Imports rose by 3.1 per cent to JD16.15 billion (JD15.67 billion), taking the Kingdom's total trade bill to JD22.1 billion.

The Kingdom's internal and external debt  increased last year by 7.6 per cent to JD20.6 billion (JD19.1 billion).

The aggregate amount invested as capital of registered companies at the Ministry of Industry, Trade and Supply reached JD196 million by the end of 2014, compared to JD338 million in 2013, the report showed, noting that these companies were spread over trade, services, construction, industry and agriculture sectors. 

Returned cheques during 2014 came at JD1.73 billion, JD997 million of which were returned for "insufficient funds", while the total value of returned cheques in 2013 stood at JD1.52 billion, according to the report.

AMMAN — Exporting to Syria has stopped, as well as to Iraq and Yemen, the chairman of Arabian Steel Pipes Manufacturing Company told the shareholders during the general assembly meeting.

Musa Shehada said exports accounted for about 50 per cent of total sales and, with the turbulence around us, it is only natural that business activity slackened .

"The modest activity was not due to inefficiency or incapability but rather a result of political and military developments in neighbouring countries," Shehada added.

As an example, he mentioned that even exporting to Mosul via Saudi Arabia and Kuwait is no longer possible.

"Now we are looking for new openings and Algeria is an opportunity for us to try exporting to that country," he indicated, pointing out that even government tenders related to our products are no longer as they used to be.

The company, established in 1983 as a private shareholding firm and transformed into a public shareholding entity in 1993, produces black and galvanised steel pipes, coated and column pipes,as well as tubular and lattice low and medium tension electric poles.

Operations also include dismantling and installing high voltage towers and electromechanical works through the affiliated Arab Romanian Company for Electromechanical Constructions. 

The annual report described the competition in the market as sharp indicating that about seven local firms are engaged in the production and marketing of black pipes.

As for the galvanised pipes, it said, the competition is limited to another public shareholding company in addition to the imported pipes which enter the Kingdom duty-free.

The company faces international competition in the manufacturing of metal towers noting that it is the only Jordanian company in this field. 

The annual mentioned SABIC, the Saudi Arabia Basic Industries Company, as one of its main suppliers who provide more than 10 per cent of purchases.

According to the company's financial results as of March 31, 2015, sales totaled JD1.3 million, almost half the JD2.7 million recorded during the first quarter of last year.

As a result of a sharp fall in gross profit from JD400,000 at the end of March 31, 2014 to JD200,000, the company registered a JD100,000 loss during the first quarter of this year, after taking into account administrative, selling and other expenses.

During the first three months of last year, the company generated a JD0.1 million profit.

"If I am to be asked about the situation in 2015, I would say that only God knows," Shehada responded to a shareholder who wondered why the cash dividends were low at a rate of 10 per cent when the earnings last year were higher than the previous year.

"The board of directors debated the cash dividends and, thanks be to God,  we were able to maintain the 10 per cent distribution rate in these troubling circumstances ," the chairman said. 

The company distributed JD1.35 million in cash dividends to shareholders in 2010, JD1.8 million in 2011, JD1.35 million in 2012, JD900,000 in 2013 and JD900,000 last year.

In 2014, net sales amounted to JD11.8 million, 9.8 per cent higher than the JD10.7 million registered in 2013. Exports accounted for 34 per cent and 40 per cent of the totals respectively.

A breakdown of the earnings showed income from local sales at JD2.8 million (JD2.2 million in 2013), from exports at JD3.8 million (JD4 million), from tenders at JD4.2 million (JD4 million), and from contracting at JD1 million (JD500,000).     

Noting that the 2014 results were below aspirations as the net profit was almost unchanged from 2013 at JD1 million, Shehadeh said: "With   the increase in prices of raw materials, there is no choice but to pay the higher cost or stop production, which is not logical."

He was echoing the auditor in a response to a question from a shareholder who requested clarification as to why the costs last year rose to 83 per cent of the earnings compared to 78 per cent in 2013.

The company, with a labour force of 170 employees,  sold 12,459 tonnes of different products last year, 8.35 per cent higher than the 11,500 tonnes sold in 2013.

Output in 2014 dropped by 13 per cent to 10,900 tonnes from 12,540 tonnes in the previous year.

It aims to increase output and sales in 2015 to around 12,000 tonnes.  

The profit and loss statement as of December 31, 2014 showed that production cost rose by 15.3 per cent to JD9.8 million (JD8.5 million).

According to the balance sheet at the end of last year, total assets amounted to JD20.9 million (JD20.3 million) of which JD15.4 million (JD14.2 million) were current assets, and JD5.5 million (JD6.1 million) were fixed assets.

Current assets included JD9.7 million (JD10.2 million) of inventory, and JD2.5 million(JD1.8 million) in receivables.

Property, equipment and machinery accounted for approximately JD4.7 million of  fixed assets in both years.

Capitalised at JD9 million, the shareholders equity in both years also includes JD3.6 million of mandatory and voluntary reserves as well as JD1.6 million of retained earnings. 

Net indebtedness stood at JD4.4 million (JD4.3 million).

Jordan Islamic Bank owns the largest stake in the company as its equity stands at JD4,452,265 shares or 49.46 per cent of the capital.

Al Baraka Saudi Company has a 10.9 per cent stake.

AMMAN — Within the USAID Jordan Competitiveness Programme (USAID JCP) to develop Jordan’s workforce, Luminus Training & Consultancy announced this week in a press statement that it has launched a project to develop an entrepreneurship curriculum at five Jordanian universities.

"The entrepreneurship curriculum will target university undergraduates with the objective of promoting self-employment, innovation and self-starting ventures," the press release said.

The programme, funded through a grant by USAID JCP, will feature the development of entrepreneurship curricula to be adopted across higher education institutions in Jordan, it added.

The one-year project, which will be implemented in collaboration with the King Abdullah Fund for Development (KAFD), will be conducted across five local universities: Al Hussein Bin Talal University-Ma’an, the German Jordanian University-Madaba, Princess Sumayah University for Technology-Amman, the Hashemite University-Zarqa and the Jordan University of Science and Technology-Irbid.

Luminus has partnered with three partners to implement this project. The three partners are: International Youth Foundation (IYF), OASIS500 and Analyseize. 

DETROIT — Detroit's automakers, on track for their best sales year since 2006, may want to brace themselves for rockier times ahead.

Auto executives say the industry is as healthy as it's been since being restructured in 2009. But judging by the recent stock performance of General Motors Co (GM), Ford Motor Co and Fiat Chrysler Automotive, investors have a less robust view.

Over the past year, GM and Ford share prices have lagged the overall market, in spite of moves by those two companies to give more cash back to shareholders. 

Fiat Chrysler prices plunged earlier this month as CEO Sergio Marchionne made increasingly overt efforts to drum up interest in a merger with one of his rivals.

"The party may be starting to wind down," said Charles Chesbrough, senior principal economist for IHS Automotive. "We're still looking at a good couple years of strong demand, but the days of big sales increases are behind us."

Optimists include Kurt McNeil, head of GM's US sales operations, who said  that the industry is on track to have its best sales year since 2006. 

US sales of cars and light trucks are estimated to reach 17 million in 2015, compared with about 10 million in 2009.

US consumer confidence is up, house prices are recovering and gasoline costs less than $4 a gallon in most parts of the country, supporting sales of the big trucks and SUVs that drive profits for the Detroit Three, just as they did before the financial crisis crash in 2008-2009.

But there are warning signals. Sales growth is slowing in the home market, demand for small cars and family sedans is falling, revenues have declined, profits outside North America and China are virtually nonexistent and share prices have flattened.

All three Detroit automakers missed analysts' expectations for first-quarter earnings. After reporting healthy April US car sales, stocks fell again at all three.

US sales growth this year has slowed to 6 per cent from double digits in 2010-2012. As demand slows, and more companies add production capacity in North America, competition from Asian and European rivals using cheap currencies will intensify. 

GM's share of the North American market in the first quarter slipped to 16.4 per cent in the first quarter from 16.5 per cent a year earlier.

"Over the next couple years, we expect to see the industry cycle down — not next year, but 2017," said John Hoffecker, managing director and global vice chairman of operations at AlixPartners. 

Detroit automakers have had "a good strong, long run", but "there will be a correction from where we are today",

Before the next downturn, the US carmakers "need to find long-term solutions to sustainable profitability and cost competitiveness", said Xavier Mosquet, global automotive practice leader for the Boston Consulting Group. "That may be their biggest challenge."

Part of that solution may be to reduce their dependence on the US market.

The companies need to reduce excess production capacity overseas, especially in Europe and South America, said Matthew Stover, auto analyst with Susquehanna Financial Group. And as US demand slows, they need to generate a higher return on their overseas investments.

Ford and GM are losing money in Europe even after restructuring efforts that included plant shutdowns. GM has said it expects to return to profitability in Europe in 2016. In Latin America, GM and Ford are losing money as the Brazilian economy slows and economic turmoil wracks Venezuela, where Ford earlier this year took an $800 million pre-tax writedown. 

GM has signaled it could stop Venezuelan production in July. In China, GM's profit margins fell to 9.9 per cent in the first quarter from 11.2 per cent a year earlier.

"GM and Ford earn terrific rates of return in North America, but they're getting killed in Europe and South America," Stover indicated.

AMMAN — A wider range of daily basic needs deny Jordanians the feel of financial reform,  Finance Minister Umayah Toukan said Saturday.

According to Toukan, the variety, extent and broad scope of requirements in terms of food, transportation and communication make it difficult for citizens to feel reforms that improve living standards.

He said the conditions differ from one person to another, depending on  income and nature of daily consumption. 

Within this context, Toukan added that the Cabinet had approved the Ministry of Finance's 2014-17 national executive programme for financial reform which includes six aspects, none of which stipulates extra financial burdens on citizens. 

Noting that the six aspects aim at enhancing local revenues, he listed them as rationalising public expenditures; controlling the deficit and debt; decision on  capital expenditure in economic growth; enhancing financial monitoring; and transparency and financial announcement, the minister said.

The minister stressed the importance of such reforms to reflect on citizens' living standards, expecting the real growth rate to reach 3.8 per cent this year and to continue rising during the coming years.

Toukan said the most important goal of the financial and economic reform programme is to limit the big rise in public debt, describing it as  a main concern for  all Jordanians, who have the right to expect the debt to go down, even gradually.

The growth of debt is slowing , Toukan added, noting that in 2014 it went up by less than 1 per cent, while the debt increase, starting from 2015, is expected to rise at a rate that is less than the growth of the gross domestic product (GDP).

He noted that the debt increase in the first quarter of 2015 was around JD200 million which constitute the loans of the National Electric Power Company (NEPCO) and the Water Authority.

The net public debt by the end of the 2015's first quarter stood at JD20.8 billion or 76.8 per cent of the GDP, JD12.9 billion of which was local public debt and JD7.9 billion was foreign debt, Toukan indicated.

He pointed out that the net public debt includes JD4.8 billion as NEPCO loans, constituting 17.3 per cent of the GDP, which means that NEPCO losses increased the public debt from 59.5 to 76.8 per cent.

Regarding the financial reform programme and the relation with the International Monetary Fund (IMF), Toukan said that the IMF's executive council decision came after the sixth revision which approved the disbursing of $200 million.

He also expected the IMF mission to visit the Kingdom in June to make the last revision, noting that Standard and Poor's has recently classified Jordan's economy as stable after raising the rating  from the minus level to stable last year.

He added that such procedures show that international institutions trust the government's financial and economic reform programmes. 

The minister explained that the impact of reforms  on the living standard of citizens cannot be immediate, but rather be felt gradually, noting that the increase in income is not limited to salaries, but also includes better services, such as the improvements the Kingdom witnessed in the education and health sectors.

Toukan described some discrepancies in data issued by the ministry as normal because figures depend on the reference given by different parties, emphasing that the ministry counts on real figures and international institutions' reports.

He added that initial financial data for the 2015 first quarter show a better performance for public finance, where it achieved a surplus of JD79 million, compared to a deficit of 292 million in the same period of 2014.

He also stressed that ministry and international institutions data expect the real growth for the national economy to reach 3.8 per cent in 2015, and to exceed 4 per cent in 2016.

Current foreign currency reserves stand at $13 billion and the commercial deficit dropped to 7.6 per cent of the GDP, the minister added.

AMMAN — Using coal at its Rashadiyeh plant marked a significant turnaround for Lafarge Cement Jordan.

Cementing its return to profitability at the end of 2014, the company boosted gross profit during the first quarter of this year by 633 per cent to JD4.4 million from JD0.6 million at the end of March 2014 despite lower sales which dropped to JD22.2 million compared to JD25 million during the first three months of last year.

After taking into consideration administrative, selling, marketing  and other expenses, Lafarge Cement Jordan turned the JD2.1 million loss recorded during the first quarter of last year into a JD1.9 million operational profit as of March 31, 2015.

With further reductions, arising from JD0.9 million (JD1 million as of March 31, 2014) in financing costs and JD0.8 million (JD1.2 million) in legal expenses among others, or further earnings arising from the sale of property, equipment and machinery for JD400,000 million among others, the company emerged from the JD4.4 million loss as of March 31, 2014 posting a JD 400,000 million  net pretax profit during the first three months of this year.

"After three years of losses, the company was able to achieve JD3.4 million net after–tax profit in 2014 compared to a JD26.2 million net loss recorded in 2013," Lafarge Cement Jordan Chairman Neil Curtis told the shareholders in the 63rd annual report.

In 2012, the net loss was JD19.7 million.

Curtis attributed last year's positive outcome to stringent measures taken by the company, foremost of which was starting to use coal at the Rashadiyeh factory at the end of 2013 in addition to continued tough controls on spending.

"Yet, the company still suffers from unfair competition because, without scientific justification, Lafarge Cement Jordan is not allowed to use coal at its Fuheis factory and, as such, the firm was compelled to discontinue production there for the past two years," he wrote in a foreword.

Toufic Tabbara, chief executive officer for cement and concrete in Jordan, indicated in a separate address that lower production costs and higher sales were the two factors that positively influenced the results last year.

"In 2014, the company strived painstakingly to maintain its position in the cement market," he said. "This perseverance reflected directly on the financial results proving Lafarge Cement Jordan's capability to emerge from financial hardships of previous years.

The chief executive officer credited the coal mill at the Rashadiyeh factory for substantially reducing Lafarge Cement Jordan's costs and boosting its competitiveness in the face of others that have been using coal for several years.

Within this context, he mentioned that production using fuel oil became unfeasible at the Fuheis plant and that shifting to coal was not allowed, describing this obstruction as unfair.  

Tabbara also described the production stoppage at the Fuheis factory as detrimental and adverse in terms of burdening the company with higher transportation costs from the Rashadiyeh plant to the main cement consumption market.

Besides the disadvantage from being unable to use coal at Fuheis, Tabbara expected a sharpening competition in 2015 as a result of global economic changes, especially the acute fall in fuel prices, and imports from neighbouring countries where energy costs are much lower.

He stressed the importance of operating cautiously and alertly this year to preserve the 2014 accomplishments, especially with the negative impact from higher electricity and water charges and from imperfect competitiveness due to the misfortune at Fuheis.

The annual report listed the following risks facing the company: Continued rise in energy prices and raw materials; allowing the continuation of clinker and cement imports; the limited Jordanian market where five companies produce cement; and the impact of economic slowdown on the cement market.

Financially, the performance last year was marked by a 24.9 per cent increase in sales which reached JD114.3 million, JD65.5 million of which came from cement business, and JD48.8 million from ready mix (concrete).

Geographically, Aqaba contributed JD5.5 million of the total sales. 

Gross profit amounted to JD20.5 million compared to a JD10.6 million loss in 2013 when costs totaling JD102.1 million exceeded sales which came at JD91.5 million.

The gross profit in 2014 turned into a JD9.1 million operational profit and a JD3.4 million after-tax profit when several expenses or income were taken into consideration, chiefly among them JD3.1 million in financing costs and JD3.8 million in legal expenses.

With the improved performance, following a JD21 million operational loss and JD27.5 million net pretax loss in 2013, Lafarge Cement Jordan doled out JD13.7 million (JD9.4 million) to the state treasury in the form of taxes and fees.

The balance sheet as of December 31, 2014 showed that accumulated losses amounted to JD22.8 million, and that the mandatory and voluntary reserves were JD27 millions and JD13.4 million respectively.

Out of JD190.3 million in total assets, JD62.6 million were current assets, mainly inventory and receivables, and JD109.3 million were fixed assets, particularly  property, equipment and machinery.

Short and long-term debt to banks totaled JD14.7 million (JD22.6 million), noting that Arab Bank, Housing Bank, Arab Banking Corporation, Jordan Kuwait Bank and Union Bank have credit lines extended to the company.

Other data showed JD20.4 million as the balance related to the obligation for employees' retirement health insurance benefits.

For a number of years until 2009, Lafarge Cement Jordan distributed JD39.4 million in cash dividends to shareholders at a rate of 65 per cent. The company's share price, which traded at JD13.800 in 2006, is at present trading at around JD1.700. 

Lafarge, a French company, owned 50.275 per cent of the Jordanian public shareholding company whose labour force comprised 575 employees at the end of last year. The Social Security Corporation had a 21.8 per cent stake, and Moroccan national Mayloud  Shoaiby had 10.3 per cent.

HONG KONG — The European Union (EU) is seeking Asian capital for a multi-billion euro investment plan it hopes will create more than a million jobs and revive growth.

Through the creation of the European Fund for Strategic Investment, presented in Hong Kong on Thursday during its first roadshow outside Europe, the EU seeks to inject 315 billion euros into a range of long-term projects from broadband infrastructure to green energy.

To attract investors, the EU has pledged 16 billion euros from its own budget in guarantees and is looking to fund around 20 per cent of each project.

Despite the problems posed by the Greek crisis and low growth, some Asian investors signalled an appetite for Europe.

"Asia right now is flush with liquidity and European companies are a bargain. It's a no brainer for Asian investors, particularly Chinese ones, to diversify into Europe," indicated Vincent Chu, Chairman of First Eastern Investment Group, who has already invested more than $300 million in the region.

According to Chu, Chinese companies are keen to get into Europe to access technology and know-how and bring these back into Asia.

Social costs

This know-how rests often with small, family-owned European firms that are however reluctant to accept Chinese investors, indicated Raymond Yip, deputy executive director at the Hong Kong Trade Development Council.

Asian investors, first of all Chinese, have already started investing in the EU, China's biggest export market.

But investments are often concentrated in a few countries, particularly the UK, and in real estate.

Under the plan, EU institutions would act as junior partners in any investment, meaning they would take the first hit were the project to run into problems.

The plan, expected to win final approval in the European Parliament by July, is already attracting interest from sovereign wealth funds in Asia and in the Gulf, a EU official told Reuters.

"We feel there are opportunities to invest in Europe," said George Yuen, a director at China's ICBC, the world's biggest bank by market capitalisation.

"Of course, one has to deal with issues such as high social costs. But we think the advantages outweigh the disadvantages," he added

Separately, the International monetary Fund (IMF) said in a report Thursday that Asian economies will lead world growth in 2015, expanding at a 5.6 per cent pace that is level with last year, as recoveries in India and Japan help to offset the slowdown in China.

IMF economists expressed concern, however, over the potential for weaker growth if policymakers in the region fail to follow through with needed changes, saying it was a time not for "alarm but it is a time for alert".

The IMF's regional economic outlook forecasts that growth in the Asia-Pacific area will moderate to 5.5 per cent in 2016.

Asian growth fell to 5.5 per cent in 2014 from 5.9 per cent in 2013, and is bound to shift lower as China's economy, the world's second largest, settles at a more sustainable level than the torrid double-digit pace of the past decade.

China's report of 7 per cent growth in the first quarter of the year was in keeping with that trend.

"You cannot expect that a country can keep 10 per cent growth forever," said Changyong Rhee, director of the IMF's Asia and Pacific Department. "The current phase of growth is in line with our forecasts, but even if it's a desirable slowdown it can have a negative impact on other countries."

Rising levels of debt and potential financial market disruptions are other risks to growth, though moves by Chinese financial regulators to rein in margin trading and umbrella trusts are a positive step, he indicated in a news conference that was broadcast online.

On a broader scale, the IMF report said its estimates show lower oil prices could help boost global growth by 0.3 percentage points to 0.7 percentage points in 2015. 

Major producers of oil and other commodities are suffering from lower exports, but for countries such as Japan, China and Thailand the lower costs are a boon both for businesses and consumers.

Growth varies widely across the region, from 8.3 per cent forecast for 2015 in Myanmar, 7.5 per cent for India and 6.8 per cent for China to 1 per cent for Japan.

Japan, the world's No. 3 economy, shows signs of recovering from a recession last year following an increase in the country's sales tax to 8 per cent from 5 per cent.

The IMF's report said that Japan's growth will remain modest but could improve with more aggressive measures to improve productivity through improved labour laws and corporate governance.

Despite its slowdown, China remains a main driver of global gross domestic product expansion, accounting for a larger share of world economic growth than the rest of Asia combined, the IMF said.

Reforms intended to make the state-dominated economy more productive, with stronger domestic consumption and services, and less dependence on trade and investment are crucial for future growth, Rhee stressed.

Full implementation of reforms would boost overall income by 5 per cent by 2020 over the economy's performance without such reforms, he said.

DUBAI — Dubai's Emirates airline said Thursday annual profit surged 40 per cent to $1.2 billion as revenues increased and fuel costs dropped.

The Middle East's largest carrier said revenues rose seven per cent to $24.2 billion with passenger numbers up 11 per cent to 49.3 million in the financial year 2014-15.

Emirates Chief Executive Officer Ahmed Bin Saeed Al Maktoum said the profit was achieved "despite a tough market and stiff competition".

The company said a significant drop in the price of jet fuel had reduced operating costs by seven per cent to $7.8 billion.

Fuel represented 35 per cent of operating costs, down from 39 per cent the previous year.

The Emirates chief described the drop in oil prices as a "welcome relief" that impacted the second half of the financial year.

A global supply glut has eroded prices by around 60 per cent since last year.

Emirates said it faced challenges including a weaker US dollar, to which the United Arab Emirates (UAE) dirham is pegged, as well as an 80-day runway closure at its hub for upgrading.

Competitors 'lobbying' 

Sheikh Ahmed also spoke of the challenge from competitors, alluding to US carriers pushing Washington to take action against fast-growing Gulf carriers over alleged state subsidies.

"Our competitors challenge us everyday and some are lobbying their government to restrict us," he said in a clear reference to big US carriers — Delta, United and American Airlines.

The carriers allege that the Gulf Big Three: Emirates, Qatar Airways and Abu Dhabi's Etihad have received government subsidies worth $40 billion.

They accuse the Gulf three of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses and below-market labour costs that are considered unfair subsidies by the World Trade Organisation. 

"On this front, our position has always been clear: we embrace competition because it is good for the consumer ... industry and ... also us," he told reporters. "We just have to stay ahead of our competition." 

Sheikh Ahmed charged that the "noise" was coming from legacy carriers which "thought nobody can overtake them".

The three Gulf carriers have seized a large chunk of global travel, turning their hubs into major stops on transcontinental routes.

The US carriers do not differentiate between what is a subsidy and what is "legitimate" for a state-owned carrier, according to Qatar Airways Chief Akbar Al Baker.

Etihad Airways Chief James Hogan had said his company was a "David" battling the US "Goliaths", accusing the three US carriers of themselves hiding behind protection.

Emirates operates a fleet of 219 passenger aircraft and 14 freighters, serving 144 destinations in 81 countries.

The airline operates the world's largest fleets of Airbus A380s and Boeing 777s.

The carrier said Europe was the highest revenue contributing region with $6.9 billion, up 7 per cent from the previous year, followed by Asia and Australasia, which grew 3 per cent to $6.7 billion.

Revenue from the Americas jumped 20 per cent to $3.0 billion.

Emirates President Tim Clarke said this week that the Dubai carrier will deliver a "sledgehammer" response to a report accusing major Gulf airlines of receiving unfair government subsidies.

"Having read the report, you could drive a bulldozer through just about everything... We will deal a sledgehammer to that report as far as Emirates and Dubai is concerned," Clark said at a conference in Dubai.

Clark did not say when any formal response would be delivered, but Sheikh Ahmed told reporters in Dubai it would be fair if it had two years to put together a reply since the US carriers took that long to produce their report.

Clark, who previously said he would resign if the report proved accurate, invited the heads of the three US carriers making the accusations to follow suit if they are disproved.

"If you are wrong, and we show you to be wrong... will you resign? What will do when this rebuttal comes back at you and shows the political entities that you've managed to orchestrate to come behind you that you are fundamentally wrong?" he said.

More than 250 members of Congress signed a letter urging the US departments of state and transportation to seek consultations with Qatar and the UAE over the allegations.

Clark said the argument of stealing market share was weak as many of the destinations in the Middle East, Africa and Asia were minimally served by US carriers.

"We have never been subsidised. We have never received from the government of Dubai any kind of... special treatment," Clark said, adding that the airline's growth had been achieved without state intervention or state funding but instead came from its own cash flow, debt issuance and earnings.

The airline has also played up its purchases from US and European manufacturers, such as last month's $9.2 billion engines order from Rolls-Royce.

Separately, Sheikh Ahmed said he is pressing ahead with a global expansion that could include more US routes.

Sheikh Ahmed said in an interview with the Associated Press that several American cities have asked Emirates to launch routes connecting them with its ever-expanding hub in Dubai.

He declined to name the potential destinations, citing competitive reasons and confidentiality agreements, but said the carrier is looking to accommodate the requests "in a very short period of time".

"We always learn we cannot stop and this is really the direction of the UAE government and the Dubai government. The minute you stop, somebody will pass you," he told The Associated Press. "In terms of expansion, we will continue."

The airline is looking to increase services "on every continent" — it operates multiple routes into all except Antarctica — by adding additional routes and increasing frequencies on more than 140 existing ones, he said.

The carrier recently announced plans for daily flights to Orlando, its 10th US passenger destination. That should begin September 1.

Emirates says it carried more than 2.3 million passengers to and from the US last year.

Jill Zuckman, a spokeswoman for a coalition known as the Partnership for Open and Fair Skies that includes the three big US airlines and a number of labour unions, responded to Sheikh Ahmed's comments by saying that Emirates and other Gulf carriers "aren't simply growing" by adding routes to the US.

"They are racing against the clock to dump more subsidised capacity into US markets and divert passengers away from the US airlines," she said in an statement.

Dubai Airports, which must keep pace with Emirates' breakneck growth, announced Tuesday that construction will begin later this year to expand Dubai's second airport, Al Maktoum International at Dubai World Central, so it can handle 26 million passengers a year, up from 6 million now.

Officials are eager to shift more airline traffic to that new facility even as they expand the older Dubai International Airport, now the world's busiest airport for international traffic.

Emirates needs the extra space. The carrier plans to take on 27 new aircraft this year alone and is recruiting thousands of staff to fill newly created positions and to replace those left vacant by departing employees.

It is also planning to roll out new offerings for the lucky few who fly in first-class, Sheikh Ahmed said.

"Whatever you do for today is not good for tomorrow, and this is why we have to keep on moving," he said.