Emirates Reports $5.5 Billion Loss Amid Ongoing Pandemic

Emirates Reports $5.5 Billion Loss Amid Ongoing Pandemic

Emirates, the flag carrier of the United Arab Emirates and the world’s best A380 operator, presented its annual financial figures on Tuesday morning. It’s as bad as you’d imagine during COVID, especially for an airline that relies so heavily on long-haul and transfer business. Emirates declared a loss of AED 20.3 billion (US$ 5.5 billion) for the first time in over three decades.

Begun with no passenger flights scheduled

In comparison, the airline made a profit of AED 1.1 billion (US$ 288 million) the previous year, which concluded just as world aviation was about to shut down fleet after fleet. In contrast, the financial year 2018-19 ended with a profit of AED 2.3 billion (US$626 million).

Revenue fell 66 percent to AED 30.9 billion (US$ 8.4 billion) in the year ended March 31st, owing in part to the airline’s eight-week total passenger flight suspension in and out of Dubai in late March 2020, which resulted in zero scheduled flights.

Emirates’ total passenger and cargo capacity fell by 58 percent to 24.8 billion tonne kilometres available (ATKM). It transported 6.6 million passengers in total, down 88 percent from the previous year, while seat capacity was down 83 percent.

The airline also reduced its entire fleet by 11 jets, as 14 older planes were retired and three new Airbus A380 superjumbos were delivered. Emirates sold nine Boeing 777-300ERs and five A380s in March, bringing its total fleet to 259 aircraft.

Meanwhile, the airline claims that its orders for 200 planes have not changed. Throughout the year, Emirates said it spent AED 4.7 billion (US$ 1.3 billion) on new aircraft, infrastructure, and technologies.

The total passenger flight restriction in and out of Dubai last spring cost Emirates a lot of money.

The total passenger flight restriction in and out of Dubai last spring cost Emirates a lot of money. Photo: Vincenzo Pace | Simple Flying

Meanwhile, Emirates Groups as a whole suffered a loss of AED 22.1 billion (US$ 6.0 billion). The state-owned group, which includes Emirates, Emirates SkyCargo, and Emirates Flight Catering, as well as aviation service provider dnata, witnessed a 66 percent drop in revenue year on year, ending at AED 35.6 billion (US$ 9.7 billion). The Group’s cash balance fell by 23% to AED 19.8 billion (US$ 5.4 billion).

Cargo is the main source of revenue

Emirates SkyCargo made the most of a tumultuous year, accounting for 60% of the airline’s total transportation income. To fulfil the fast expanding demand, it took over 19 passenger Boeing 777-300ERs and converted them into what the carrier referred to as “mini-freighters.”

The airline’s cargo business established a COVID-19 vaccine-specific airside hub in Dubai in October. In addition, it collaborated with UNICEF to transport vaccines to impoverished countries. Emirates SkyCargo’s revenue were AED 17.1 billion (US$ 4.7 billion) at the conclusion of the year, up 53 percent over the previous year. The freight yield per Freight Tonne Kilometer (FTK) has increased by 88%.

Emirates SKyCargo brought in 60% of the airline’s overall income last year. Photo: Emirates SkyCargo

Workforce shrunk by 31%

Despite a financial injection of AED 11.3 billion (US$ 3.1 billion) from the Dubai government and an additional AED 800 million (US$ 218 million) from industry support programmes for dnata, redundancies were inevitable across the board. Emirates Group had to lay off 31% of its workers, leaving it with 75,145 people at the end of the year.

Meanwhile, Emirates Chairman and Chief Executive, His Highness Sheikh Ahmed bin Saeed Al Maktoum, is optimistic about the airline’s recovery and future expansion.

“Until 2020-21, Emirates and dnata had a track record of growth and profitability, owing to robust business models, consistent investments in capabilities and infrastructure, a strong push for innovation, and a vast talent pool led by a stable leadership team. These essential elements of our success haven’t altered. (…) I am optimistic that Emirates and dnata will revive and become even more powerful than before.”

How long do you think it will take for Emirates to return to profitability? Please let us know in the comments section below.

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Cover Photo Credit: Vincenzo Pace | Simple Flying.