Emirates Group reports first loss in more than 30 years

posted on 15th June 2021 by Edward Robertson
Emirates Group reports first loss in more than 30 years

Emirates Group has blamed the Covid-19 pandemic for recording a loss of $6 billion, its first in more than 30 years.

Group revenue was $9.7 billion for the year ending 31 March, 2021, after the entire period was impacted by worldwide travel restrictions and border closures.

The bad news largely came from the group’s airline Emirates, which recorded a loss of $5.5 billion, having turned a profit of $288 million in the previous year.

Revenue was down by 66 per cent to $8.4 billion for the airline after commercial passenger flights out of its Dubai hub were suspended for nearly eight weeks by the government from 25 March, 2020.

This and other travel bans meant 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.

Meanwhile, the fleet was reduced by 11 aircraft to 259 after 14 aircraft, 9 Boeing 777-300ERs and 5 Airbus A380s, were phased out, although the airline also took delivery of three new A380s.

Sister company dnata saw a loss of $496 million having recorded a profit of $168 million in the previous year.

The Emirates Group also went ahead with the acquisition of destination management company Destination Asia as well as the opening of new catering and retail facilities.

Emirates Airline and Group chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum said: “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.

“Our top priorities throughout the year were: the health and wellbeing of our people and customers, preserving cash and controlling costs, and restoring our operations safely and sustainably.

“Emirates received a capital injection of $3.1 billion from our ultimate shareholder, the government of Dubai, and dnata tapped on various industry support programmes and received total relief of nearly $217.8 million in 2020-21.

“These helped us sustain operations and retain the vast majority of our talent pool. Unfortunately, we still had to make the difficult decision to resize our workforce in line with reduced operational requirements.”

He added for the first time in the group’s history, redundancies were implemented across all parts of the business with total workforce reduced by 31% to 75,145 employees.

In addition, a cost reduction programme saved the group an estimated $2.1 billion during the year, although as much as $1.3 billion was spent on the new aircraft and facilities as well as acquisitions.

Sheikh Ahmed said: “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.

“Until 2020-21, Emirates and dnata have had a track record of growth and profitability, based on solid business models, steady investments in capability and infrastructure, a strong drive for innovation, and a deep talent pool led by a stable leadership team.

“These fundamental ingredients of our success remain unchanged. 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.”

“In the year ahead, we will continue to adopt an agile approach in responding to the dynamic marketplace.

“We aim to recover to our full operating capacity as quickly as possible to serve our customers, and to continue contributing to the rebuilding of economies and communities impacted by the pandemic.”