Emirates, famously profitable until now, has slid to a US$5.5 billion loss for the year ending 31 March 2021, a pandemic-ravaged result that compares to US$288 million profit the previous year. It is the airline’s first annual loss in more than three decades.
Revenue dived 66% to US$8.4 billion as long-haul travel was slammed by the Covid-19 pandemic.
The Government of Dubai (the airline’s ultimate shareholder) injected US$3.1 billion in capital.
Emirates ended the financial year with a solid cash balance of US$5.4 billion.
For the first time in the airline group’s history, redundancies were implemented across all parts of the business. As a result, the group’s total workforce reduced by 31% to 75,145 employees, representing over 160 different nationalities.
In a statement coinciding with the financial result, Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “The Covid-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry. In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.
“Our top priorities throughout the year were: the health and wellbeing of our people and customers, preserving cash and controlling costs, and restoring our operations safely and sustainably. Emirates received a capital injection of AED 11.3 billion (US$ 3.1 billion) from our ultimate shareholder, the Government of Dubai, and dnata tapped on various industry support programmes and availed a total relief of nearly AED 800 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.”
The revenue decline is attributable to the temporary suspension of passenger flights at Emriates hub in March 2020 and ongoing global travel restrictions. Airline capacity reduced to 24.8 billion ATKMs, with aircraft fleet size reduced by 11 aircraft.
dnata reported a loss of AED 1.8 billion (US$ 496 million) down from AED 618 million (US$ 168 million) profit in the previous year.
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.”
He concluded: “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.”
Emirates received three new A380 aircraft during the financial year and phased out 14 older aircraft comprising of 9 Boeing 777-300ERs and 5 A380s, leaving its total fleet count at 259 at the end of March. Emirates’ average fleet age remains at a youthful 7.3 years.
Despite the depredations of the pandemic, Emirates’ order book for 200 aircraft remains unchanged so far. The airline is firmly committed to its long-standing strategy of operating a modern and efficient fleet, which underscores its “Fly Better” brand promise, as young aircraft are better for the environment, better for operations, and better for customers.
Working closely with aviation stakeholders to design and implement bio-safety measures, Emirates gradually restored its passenger network and hub connectivity from mid-June 2020 as the UAE re-opened for transit travellers and later for international arrivals.
During the year, Emirates reactivated its strategic codeshare partnership with flydubai and entered into agreements with new partners TAP Air Portugal, FlySafair, and Airlink in South Africa, to expand connectivity for its customers.
From zero scheduled passenger flights at the start of the financial year, operations had expanded to over 120 destinations by 31 March 2021.
Emirates carried 6.6 million passengers (down 88%) in 2020-21, with seat capacity down by 83%. The airline reports a Passenger Seat Factor of 44.3%, compared with last year’s passenger seat factor of 78.5%; and a 48% increase in passenger yield to 10.6 US cents per Revenue Passenger Kilometre (RPKM), due largely to a favourable route mix, fares and continued healthy demand for premium seats. Seat load factor and yield results cannot be compared against the previous year’s performance due to the unusual pandemic situation.
In response to the pandemic, Emirates led the industry in developing new service and operating protocols to protect its customers and employees. During the year, it launched numerous customer initiatives such as: providing the industry’s first complimentary Covid-19 medical cover for all passengers; waiving fees so customers can rebook their travel without penalty; expediting refunds handling; and fast-tracking biometric processing and other technology projects that enhanced the travel experience while reducing contact at airport touchpoints.
Emirates closed the financial year with cash assets of AED 15.1 billion (US$ 4.1 billion), a position which would have stronger if not for a one-time payout of AED 8.5 billion for customer refunds.
Edited by Peter Needham
