Emirates, the airline owned by the government of Dubai in the United Arab Emirates, reported its seventeenth successive profitable year despite having to cope with higher fuel prices, the aftermath of the Asian tsunami, and stiff competition.

The report shows that full-year net profits were $637 million, up 49 percent. One board member said that the rise in fuel prices the biggest obstacle to future profits.

In the year just reported, fuel costs were 21 percent of total operating costs, up from 14 percent the year before.

These higher fuel prices mean that Emirates has postponed plans to schedule direct flights from Dubai to Chicago, Houston, and San Francisco.

It is also looking at the idea of launching an IPO, as it insists that it has to deal with rising fuel prices just like all airlines. It denies that it is subsidized by Dubai or the

UAE. Emirates carried 12.5 million passengers in the year just reported, an increase of 2.1 million passengers from the previous year.