Emirates posts first annual loss in over 30 years

Emirates airline on Tuesday announced Dh20.3 billion loss for the financial year ended on March 31, 2021 as compared to Dh1.1 billion profit during previous year, posting its first loss in 30 years due to the impact of coronavirus pandemic on the airline and aviation industry.

With significantly reduced and constrained capacity deployment across most markets, Emirates’ total revenue declined 66 per cent to Dh30.9 billion.

“The Covid-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry. In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions,” said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and CEO of Emirates Airline and Group.

“No one knows when the pandemic will be over, but we know recovery will be patchy. Economies and companies that entered pandemic times in a strong position, will be better placed to bounce back,” said Sheikh Ahmed.

The Dubai-based carrier also took one-time impairment charge of Dh710 million related to certain aircraft which are currently grounded and are not expected to return to service before their scheduled retirement within the next financial year.

The world’s largest international passenger airline carried 6.6 million passengers, down 88 per cent, in 2020-21, with seat capacity down by 83 per cent.

It received three new A380 aircraft and phased out 14 older aircraft, leaving its total fleet count at 259 at the end of March. Its order book for 200 aircraft remains unchanged at this time. It was operating to 120 destinations at the end of March 2021.

Passenger, cargo capacity decline

The Emirates’ total passenger and cargo capacity declined by 58 per cent to 24.8 billion available tonne kilometres (ATKMs) at the end of 2020-21, due to pandemic related flight and travel restrictions.

Total operating costs decreased by 46 per cent from last financial year. The fuel bill declined by 76 per cent to Dh6.4 billion, driven primarily by 69 per cent lower uplift in line with capacity reduction.

With the strong demand in air freight throughout the year, Emirates’ SkyCargo reported Dh17.1 billion revenue, an increase of 53 per cent over last year.

Emirates’ hotels portfolio recorded revenue of Dh296 million, a decline of 49 per

In addition to the Dh14.5 billion financing that was raised for aircraft and general corporate purposes in 2020-21, Emirates has already received committed offers to finance two aircraft deliveries due in 2021-22 and continues to tap the financial market for further liquidity to provide a cushion for the potential impact of Covid-19 on the business cash flows in the near term.

Emirates closed the financial year with cash assets of Dh15.1 billion.

Emirates Group loss

Meanwhile, the Emirates Group posted a loss of Dh22.1 billion for 2020-21 financial year compared with an Dh1.7 billion profit for in the previous year.

The Group’s revenues stood at Dh35.6 billion, a decline of 66 per cent over last year’s results. Its cash balance was Dh19.8 billion, down 23 per cent from last year mainly due to weak demand caused by the various pandemic related business and travel restrictions.

In 2020-21, the group collectively invested Dh4.7 billion in new aircraft and facilities, the acquisition of companies, and the latest technologies to position the business for recovery and future growth.

“Together with Dubai’s undiminished ambitions to grow economic activity and build a city for the future, I am confident that Emirates and dnata will recover and be stronger than before,” he added.

In the year ahead, Emirates aims to recover to full operating capacity as quickly as possible, said Sheikh Ahmed.

— waheedabbas@khaleejtimes.com