Category Archives: Emirates Group

Emirates Group records an annual loss of AED 3.8 billion (US $1.0 billion)

Emirates Group issued this financial report:

Group records annual loss of AED 3.8 billion (US$1.0 billion) due to the ongoing COVID-19 pandemic impact, a significant improvement from last year with dnata returning to profitability

  • Group revenue of AED 66.2 billion (US$ 18.1 billion) increased by 86% with strong customer demand as worldwide travel restrictions ease
  • Ends year with an improved and strong cash balance of AED 25.8 billion (US$7.0 billion)

Emirates reports a significantly reduced loss of AED 3.9 billion (US$1.1 billion) compared with AED 20.3 billion (US$5.5 billion) loss in the previous year

  • Revenue up 91% to AED 59.2 billion (US$16.1 billion), as airline expanded global capacity and reinstated more passenger flights
  • Airline capacity increased by 47% to 36.4 billion ATKMs, with final five A380 aircraft added to its fleet

dnata reports a profit of AED 110 million (US$ 30 million), a solid turnaround from its AED 1.8 billion (US$496 million) loss in the previous year

  • Revenue increased by 54% to AED 8.6 billion (US$2.3 billion), reflecting recovery from the pandemic across all business divisions in the UAE and worldwide
  • Expands global footprint with the takeover of easyJet’s global onboard retail services and the opening of new cargo, airport hospitality and retail facilities

The Emirates Group today released its 2021-22 Annual Report which shows strong recovery across its businesses. dnata returns to profitability, and significant revenue improvements were reported across both Emirates and dnata as the Group rebuilt its air transport and travel-related operations which were previously cut-back or curtailed by the COVID-19 pandemic.

For the financial year ended 31 March 2022, the Emirates Group posted a loss of AED 3.8 billion (US$1.0 billion) compared with an AED 22.1 billion (US$6.0 billion) loss for last year. The Group’s revenue was AED 66.2 billion (US$18.1 billion), an increase of 86% over last year’s results. The Group’s cash balance was AED 25.8 billion (US$ 7.0 billion), up 30% from last year mainly due to strong demand across its core business divisions and markets, triggered by the easing of pandemic-related restrictions.

His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “This year, we focussed on restoring our operations quickly and safely wherever pandemic-related restrictions eased across our markets. Business recovery picked up pace particularly in the second half of the year. Robust customer demand drove a huge improvement in our financial performance compared to our unprecedented losses of last year and we built up our strong cash balance.

“The health and safety of our people and customers remained a key priority as the world navigated its second full year of the pandemic. Across Emirates and dnata, we responded to dynamic market conditions with agility, and introduced innovative products and services to meet our customers’ needs and provide them with the best possible experience.

“2021-22 was also a significant year as the UAE marked its 50th anniversary and hosted the world at Expo 2020 Dubai which generated increased global engagement and visitation to the UAE. The Emirates Group was proud to play our part in contributing to the Expo’s success and to the UAE’s jubilee events.”

In 2021-22, Emirates received a further capital injection of AED 3.5 billion (US$ 954 million) from its ultimate shareholder, the Government of Dubai, and the Group tapped on various industry support programmes and availed a total relief of nearly AED 0.8 billion in 2021-22.

As Emirates and dnata ramped up operations, employees previously on furlough or made redundant were recalled and rehired, and new recruitment drives were held to replenish the Group’s talent pool and boost its future capabilities. As a result, the Group’s total workforce increased by 13% to 85,219 employees, representing over 160 different nationalities.

In 2021-22, the Group collectively invested AED 7.9 billion (US$ 2.2 billion) in new aircraft and facilities, and the latest technologies to position the business for recovery and future growth. It also continued to progress its environmental strategy focussed on reducing carbon emissions, consuming resources responsibly, and conserving wildlife and habitats. During the year, the Group supported community, humanitarian and philanthropic initiatives in its various markets, as well as innovation incubators, and other programmes that nurture future solutions for industry growth.

Sheikh Ahmed said: “For the Emirates Group, 2021-22 was largely about recovery, after the toughest year in our Group’s history. It’s not just about restoring our capacity, but also augmenting our future capabilities as we rebuild. Our aim is to build back better and stronger, so that we can deliver even better experiences to our customers and offer more support to the communities we serve.

“We expect the Group to return to profitability in 2022-23, and are working hard to hit our targets, while keeping a close watch on headwinds such as high fuel prices, inflation, new COVID-19 variants, and political and economic uncertainty.

“Our steady investments in infrastructure, technology, people, and partnerships, will continue to give us the ability and advantage in delivering industry-leading products and value to our customers. As Dubai and the UAE move ahead with its strategy for the next 50 years and beyond, the Emirates Group is well positioned to play our role in contributing to economic growth, facilitating global engagement, and making a positive impact on people and communities.”

Emirates performance

Emirates’ total passenger and cargo capacity increased by 47% to 36.4 billion ATKMs in 2021-22, as the airline continued to reinstate passenger services across its network in line with the lifting of pandemic-related flight and travel restrictions.

From 120 destinations at the start of the financial year, to increased operations and capacity growth across over 140 destinations by 31 March 2022, Emirates was able to respond dynamically to serve customer demand wherever opportunities arose, thanks to the resilience of its people and business model. In July, the airline launched a new route to Miami, bringing its total passenger gateways in the US to 12.

To serve the strong rebound in travel demand, Emirates deployed its flagship A380 aircraft to even more cities during the year, bringing its A380 network to 29 destinations as of 31 March 2022.

Helping travellers access even more destinations, in 2021-22, Emirates reinforced its strategic partnerships with Qantas and flydubai, and expanded its interline and codeshare partnerships across Europe, the Americas, Africa and Asia including with: Aeromar, airBaltic, Airlink, Azul, Cemair, Garuda Indonesia, Gulf Air, Maldivian, South African Airways and TAP Air Portugal. Emirates also signed agreements and launched initiatives with tourism partners in various destinations to support travel and tourism recovery.

Emirates received its final five new A380 aircraft during the financial year, all equipped with its latest cabin interiors including Premium Economy seats. It also phased out 2 older aircraft comprising of 1 Boeing 777-300ER and 1 Freighter, leaving its total fleet count at 262 at the end of March. Emirates’ average fleet age remains at a youthful 8.2 years.

Emirates’ order book of 197 aircraft remains unchanged at this time. 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.

With significantly enhanced capacity deployment across most markets, Emirates’ total revenue for the financial year increased 91% to AED 59.2 billion (US$ 16.1 billion). Currency fluctuations this year impacted the airline’s profitability negatively by AED 348 million (US$ 95 million).

Total operating costs increased by 30% from last financial year. Cost of ownership (depreciation and amortisation) and fuel cost were the two biggest cost components for the airline in 2021-22, followed by employee cost. Fuel accounted for 23% of operating costs compared to 14% in 2020-21. The airline’s fuel bill more than doubled to AED 13.9 billion (US$ 3.8 billion) compared to the previous year, driven by a higher uplift of 66% in line with capacity expansion and a higher average fuel price which was up by 75%.

With the removal of pandemic-related flight and travel restrictions globally, the airline managed to substantially improve its financial results and reported a loss of AED 3.9 billion (US$ 1.1 billion) after last year’s AED 20.3 billion (US$ 5.5 billion) loss, and a loss margin of 6.6%, significantly improved compared to 65.6% last year.

Emirates carried 19.6 million passengers (up by 199%) in 2021-22, with seat capacity up by 150%. The airline reports a Passenger Seat Factor of 58.6%, compared with last year’s passenger seat factor of 44.3%; and a 10% decline in passenger yield to 35.1 fils (9.6 US cents) per Revenue Passenger Kilometre (RPKM), due to the change in route mix, fares and currency. Seat load factor and yield results cannot be compared against the previous year’s performance due to the ongoing unusual pandemic situation.

Emirates continued to invest in its products and services to deliver ever better customer experiences. This year, it announced a major retrofit programme to equip 120 of its 777 and A380 aircraft with its new Premium Economy seats and the latest cabin interiors.

It also accelerated digital initiatives to provide customers with smoother and safer journeys, from the quick and secure verification of COVID-19 travel documents, to more biometrics and contactless touchpoints at its Dubai hub.

Emirates continued to lead the industry with initiatives that provide customer assurance as travel restrictions eased and more people made travel plans. It extended its generous rebooking waivers and complimentary COVID-19 medical cover for all customers; and introduced new ways for Emirates Skywards members to earn Miles while extending the expiry of miles and tier status.

In this 2nd pandemic year, Emirates SkyCargo once again put in a stellar performance and contributed to 40% of the airline’s total transport revenue through its ability to respond rapidly to changing demand patterns in a distorted global marketplace.

Emirates SkyCargo maintained its edge in the global airfreight industry by focusing its customers, bringing innovative solutions to the market, and leveraging its fleet and network capabilities.

Rebuilding its network and capacity, the cargo division intelligently deployed its freighter fleet and belly-hold capacity, to meet customer needs. By 30 June 2021, it had restored services to over 90% of its pre-pandemic network.

During the year, Emirates SkyCargo continued to play an important role in getting COVID-19 vaccines and other medical supplies to communities around the world, and keeping trade lanes open for food supplies, e-commerce and other essential goods. In June 2021, it invested to scale up its pharma cool chain infrastructure in Dubai and by March 2022, Emirates SkyCargo had transported 1 billion doses of COVID-19 vaccines.

At the Dubai Airshow 2021, Emirates announced a US$ 1 billion investment to acquire 2 new Boeing 777 freighters and convert 4 existing 777-300ER aircraft into freighters.

With steady and strong air freight demand throughout the year, Emirates’ cargo division reported a new record revenue of AED 21.7 billion (US$ 5.9 billion), an increase of 27% over last year.

Freight yield per Freight Tonne Kilometre (FTKM) decreased by 3% as more cargo capacity returned to the global market, but generally remained at high levels compared to the pandemic marketplace due to steady and strong demand.

Tonnage carried increased by 14% to reach 2.1 million tonnes, due to the growth in available bellyhold capacity for the entire year with the reinstatement of more passenger services. At the end of 2021-22, Emirates’ SkyCargo’s total freighter fleet stood at 10 Boeing 777Fs.

Emirates’ hotels portfolio doubled revenue over last year to AED 602 million (US$ 164 million) as it re-opened more facilities to serve the upswing in tourism traffic and the gradual recovery of the meetings and conferences industry.

During the year, Emirates successfully restructured and extended various aircraft leases. The support from aviation lessors and financing partners during these challenging times reflect the financial community’s confidence in Emirates’ business model, and its mid to longer term prospects.

In addition to the AED 9.7 billion (US$ 2.6 billion) financing that was raised for aircraft and general corporate purposes in 2021-22, Emirates has already received committed offers to finance two aircraft deliveries due in 2022-23.

Emirates closed the financial year with solid cash assets of AED 20.9 billion (US$ 5.7 billion), 38% higher compared to 31 March 2021.

dnata performance

Recovery from the pandemic was felt across all dnata businesses, and in 2021-22 dnata returned to profitability with a profit of AED 110 million (US$ 30 million).

With growing flight and travel activity across the world, dnata’s total revenue increased by 54% to AED 8.6 billion (US$ 2.3 billion). dnata’s international business accounts for 62% of its revenue.

dnata continued to lay the foundations for future growth with investments in 2021-22 amounting to AED 370 million (US$ 101 million).

During the year, dnata invested significantly in its cargo handling capabilities. It expanded existing facilities in Sydney, Australia; opened a state-of-the-art cargo centre at London Heathrow airport; and announced a fully automated cargo centre to be built at ‘dnata Cargo City’ at Amsterdam Schiphol Airport. It also introduced an advanced “OneCargo” system which digitises and automates business and operational functions at its Iraq cargo operations, with plans to roll out the system across its global cargo network.

In 2021-22, dnata’s operating costs increased by 14% to AED 8.4 billion (US$ 2.3 billion), in line with expanded operations in its Airport Operations, Catering and Travel divisions across the world.

dnata’s cash balance improved by AED 208 million to AED 4.9 billion (US$ 1.3 billion). Net cash used in financing activities, primarily payments for loans and leases, amounted to AED 745 million (US$ 203 million), while the business utilised net cash of AED 246 million (US$ 67 million) in essential investing activities. The business saw a positive operating cash flow of AED 1.2 billion (US$ 332 million) in 2021-22, a reflection of the substantial improvements in revenues.

Revenue from dnata’s Airport Operations, including ground and cargo handling increased to AED 5.7 billion (US$ 1.6 billion).

The number of aircraft turns handled by dnata globally grew by 82% to 527,501, cargo handled increased by 10% to 3.0 million tonnes, reflecting the increase in flight activity across the globe as dnata’s customers re-started their operations wherever market restrictions on flights and travel were lifted.

During 2021-22, dnata expanded its global airport operations footprint into Africa. It signed a concession agreement with The Government of Zanzibar, where dnata will oversee the operations of the island’s newly-built international terminal with its partners, including Emirates Leisure Retail (ELR) who will partner with MMI as master concessionaire for all food and beverage, duty free and commercial outlets at the terminal.

marhaba, dnata’s airport hospitality brand, marked its 30th year of operations with the launch of its signature meet and greet services at four of Australia’s major airports, a new lounge in Zurich Airport, and a re-designed experience at its flagship lounge at Dubai International.

dnata’s Catering business accounted for AED 1.7 billion (US$ 455 million) of dnata’s revenue, up by 60%. The inflight catering business uplifted 39.9 million meals to airline customers, more than double the number of meals from last year, as its airline customers across the world restored their flight operations.

Significant customer wins during the year include BA CityFlyer, which led to dnata Catering launching operations at London City Airport; and the global inflight retail services contract for easyJet where dnata’s team of inflight retail experts will develop and manage bespoke onboard retail programmes and solutions for the airline.

It also saw significant activity in Australia. As the country re-opened its borders to international travellers, dnata worked closely with airline customers to support their resumption of flight operations. dnata Catering also continued to grow its retail food business with ready-made meals developed by Snapfresh Australia launched in Aldi and Costco stores nationwide.

Revenue from dnata’s Travel Services division has significantly grown by 434% to AED 694 million (US$ 189 million). The reported total transaction value (TTV) of travel services sold increased by 912% to AED 2.3 billion (US$ 632 million), a dramatic reversal from last year. These increases reflect last year’s abnormal situation where the business saw high levels of COVID-19-related booking cancellations.

During the year, dnata introduced several new products and services in the UAE, capitalising on its market expertise, Dubai’s open borders for international travel, the city’s hosting of Expo 2020 as well as other major conferences and sporting events.

For its corporate travel customers, dnata partnered with ExpensePoint to offer an advanced expense reporting solution; renewed a partnership with one of the world’s largest VAT reclaim specialists that will bring additional saving opportunities for duty travel claims; and implemented hybrid meetings and events solutions to provide customers a sustainable alternative to hosting corporate engagements during lockdown.

In the UK, dnata’s Travel Republic brand introduced a new ‘Secure Trust Account’ for package holiday customers that guarantees prompt refunds for customers who have to cancel their flight-inclusive package holiday, as funds are kept secure in a separate account.

dnata also launched its Gold Medal brand in the Kingdom of Saudi Arabia this year, offering its extensive portfolio of travel products to independent travel agents.

Emirates aircraft photo gallery:

Emirates SkyCargo responds to growing global demand by reinstating dual hub operations in Dubai

Emirates SkyCargo has announced that it will be reactivating its cargo hub in Dubai South, Emirates SkyCentral DWC, for dedicated freighter aircraft operations from 26 March 2022.

The move will mark a return to dual hub cargo operations in Dubai for the air cargo carrier after a period of nearly two years. In April 2020, Emirates SkyCargo consolidated its freighter (main deck) and passenger (bellyhold) cargo operations at Dubai International Airport (DXB) in light of the suspension of passenger flights during the early stages of the COVID-19 pandemic. The consolidation was aimed at streamlining and expediting the transport of essential supplies and medical items across the world.

With the growth of Emirates’ passenger network and operations, as well as the progressive increase in cargo volumes, Emirates SkyCargo will once again structure its operations across two hubs in Dubai- with Emirates SkyCentral DXB handling cargo arriving or departing on passenger aircraft and Emirates SkyCentral DWC handling cargo on freighter aircraft.

Emirates SkyCentral DWC was inaugurated in 2015 and has a total cargo capacity of more than 1 million tonnes per annum. The state of the art terminal features extensive cool chain handling facilities as well as a dedication pharma handling zone certified for EU GDP standards. Dedicated aircraft parking stands in close proximity to the terminal allow for rapid and efficient transportation of cargo.

A fleet of dedicated trucks operating on a 24-7 basis will provide seamless connectivity for cargo between the two airports. For high priority cargo and urgently required commodities, Emirates SkyCargo will be able to connection time of under five hours from wheels down at DXB to wheels up at DWC and vice-versa.

Emirates SkyCargo is the air freight division of Emirates, offering cargo capacity to customers on its fleet of all widebody Boeing 777 and Airbus A380 aircraft over a global network of more than 140 destinations across six continents.

IAI to convert Boeing 777-300ER passenger aircraft to cargo configuration for Emirates

Israel Aerospace Industries (IAI) signed an agreement to convert four Boeing 777-300ER passenger aircraft to cargo configuration for Emirates. The aircraft will be converted at the new site established in Etihad Engineering’s MRO center in Abu Dhabi, and the first conversion of the Emirates plane is expected to begin in early 2023. The agreement has potential to provide passenger-to-freighter conversion services to more aircraft.

Dubai-based Emirates is the largest operator of Boeing 777-300ER aircraft in the world and Emirates SkyCargo is a leading player in the global air cargo industry. This agreement between IAI, the global leader in the cargo conversion industry, and the cargo division of Emirates is a testament to the strong ties between IAI and the UAE.

 

 

Emirates Group reports a half-year net loss of AED 5.7 billion ($1.6 billion)

right side

Emirates Group released this financial report:

  • Group: Revenue up 81% to AED 24.7 billion (US$ 6.7 billion), and loss of AED 5.7 billion (US$ 1.6 billion) after last year’s loss of AED 14.1 billion (US$ 3.8 billion). Substantially improved results reflect recovery across all business segments and easing of COVID-19 pandemic travel restrictions worldwide.
  • Emirates: Revenue up 86% to AED 21.7 billion (US$ 5.9 billion), and loss of AED 5.8 billion (US$ 1.6 billion) compared to AED 12.6 billion (US$ 3.4 billion) loss for the same period last year. Revenue recovery supported by increasing passenger demand and continuous strong cargo business.
  • dnata: Revenue up 55% to AED 3.7 billion (US$ 1 billion), profit of AED 85 million (US$ 23 million) after last year’s loss of AED 1.5 billion (US$ 396 million), as operations across all dnata business units globally recover from the substantial impact of COVID-19.

 

The Emirates Group today announced its half-year results for its 2021-22 financial year.

Group revenue was AED 24.7 billion (US$ 6.7 billion) for the first six months of 2021-22, up 81% from AED 13.7 billion (US$ 3.7 billion) during the same period last year. This strong revenue recovery was underpinned by the easing of travel restrictions worldwide and the corresponding increase in demand for air transport as countries progressed their COVID-19 vaccination programs.

The Group is reporting a 2021-22 half-year net loss of AED 5.7 billion (US$ 1.6 billion), substantially improved from its AED 14.1 billion (US$ 3.8 billion) loss for the same period last year.

The Group also reported an EBITDA of AED 5.6 billion (US$ 1.5 billion), a dramatic turnaround from a negative AED 43 million (US$ 12 million) EBITDA during the same period last year, illustrating its strong return to operating profitability.

The Group continued to maintain a healthy cash position which stood at AED 18.8 billion (US$ 5.1 billion) on 30 September 2021, compared to AED 19.8 billion (US$ 5.4 billion) as on 31 March 2021.

His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: “As we began our 2021-22 financial year, COVID-19 vaccination programs were being rolled out at unprecedented scale around the world. Across the Group, we saw operations and demand pick up as countries started to ease travel restrictions. This momentum accelerated over the summer and continues to grow steadily into the winter season and beyond.

“Our cargo transport and handling businesses continued to perform strongly, providing the bedrock upon which we were able to quickly reinstate passenger services. While there’s still some way to go before we restore our operations to pre-pandemic levels and return to profitability, we are well on the recovery path with healthy revenue and a solid cash balance at the end of our first half of 2021-22.

Sheikh Ahmed added: “We would like to thank our customers for their continued support, as well as all our aviation and travel industry stakeholders and partners for their efforts that have made it possible for international air travel to resume safely and smoothly.”

“Our ability to pivot and pull through the toughest period in our history to date, can be attributed to Emirates’ and dnata’s strong brands, high quality products and services, digital and innovation capabilities, and our amazing people. We intend to continue investing in these core areas to take our business into the future, together with the leaner processes and new technology capabilities that we’ve implemented in the past months.”

The Emirates Group has been able to tap on its own strong cash reserves, and access funding through its Owner and the broader financial community to support its business needs through the unprecedented challenges wrought on the aviation and travel industry by COVID-19. In the first half of 2021-22, its Owner further injected AED 2.5 billion (US$ 681 million) into Emirates by way of an equity investment and they continue to support the airline on its recovery path.

The Emirates Group’s employee base, compared to 31 March 2021, dropped marginally by 2% to an overall count of 73,571 at 30 September 2021. In line with the expected ramp up in capacity and business activities in the coming months, Emirates and dnata have embarked on targeted recruitment drives to support its requirements, prioritizing the rehiring of employees previously on furlough or made redundant.

Emirates airline

During the first six months of 2021-22, Emirates took delivery of 2 new A380s and retired 2 older aircraft from its fleet as part of its long-standing strategy to improve overall efficiency, minimize its emissions footprint, and provide high quality customer experiences.

With a clear focus on restoring its passenger network and connections through its Dubai hub, Emirates responded with agility whenever travel restrictions lifted to restart services or layer on additional flights. In July, it launched services to Miami, a new destination, and during the first half of 2021-22, Emirates also activated codeshare and interline partnerships with Airlink, Aeromar, Azul, Cemair and South African Airways to expand connectivity options for customers.

By September 30, 2021, the airline was operating passenger and cargo services to 139 airports, utilizing its entire Boeing 777 fleet and 37 A380s.

Emirates also continued to introduce initiatives that improve travel experience, boost customer confidence, and enable secure and efficient operations. In June, Emirates became the first airline to sign up for the worldwide implementation of the IATA Travel Pass, in addition its ongoing investments in additional biometric and other digital verification technologies at Dubai Airport.

For its premium customer and frequent flyers, Emirates reinstated more of its signatures Lounge and Chauffeur Drive services at key airports outside of Dubai, and it also launched an online subscription platform “Skywards+”, to offer its 27 million members easy access to customized rewards and privileges.

Overall capacity during the first six months of the year increased by 66% to 16.3 billion Available Tonne Kilometers (ATKM) due to a substantially expanded flight program as more countries eased travel and flight restrictions. Capacity measured in Available Seat Kilometers (ASKM), more than tripled by 250%, whilst passenger traffic carried measured in Revenue Passenger Kilometers (RPKM) was up by 335% with average Passenger Seat Factor recovering to 47.9%, compared with last year’s pandemic figure of 38.6%.

Emirates carried 6.1 million passengers between 1 April and 30 September 2021, up 319% from the same period last year. The volume of cargo uplifted at 1.1 million tonnes has increased by 39%, which brings the business back to 90% of pre-pandemic (2019) levels by volume handled. This shows Emirates Skycargo’s outstanding agility and ability to meet the requirements of its customers whether it be for the transport of vaccines and pharmaceuticals, essential goods like food and perishables, or champion horses and high performance cars.

In the first half of 2021-22, Emirates Skycargo boosted its pharma cool chain handling infrastructure with the addition of 94 cool room pallet positions to its existing EU GDP compliant infrastructure at Dubai airport. Emirates Skycargo continues to support the global roll-out of COVID-19 vaccines, having carried over 150 million doses through its Dubai hub by July 2021.

In the first half of the 2021-22 financial year, Emirates loss was AED 5.8 billion (US$ 1.6 billion), compared to last year’s loss of AED 12.6 billion (US$ 3.4 billion). Emirates revenue, including other operating income, of AED 21.7 billion (US$ 5.9 billion) was up 86% compared with the AED 11.7 billion (US$ 3.2 billion) recorded during the same period last year. The strong revenue recovery reflects quick return of passenger demand wherever flight and travel restrictions were eased around the world.

Emirates operating costs increased by 22% against an overall capacity growth of 66%. Fuel costs more than doubled compared to the same period last year. This was primarily due to an 81% higher fuel uplift in line with substantially increased flight operations during the six-month period up to end of September, and also an increase in average oil prices. Fuel, which was the largest component of the airline’s operating cost in pre-pandemic reporting cycles, accounted for 20% of operating costs compared to only 11% in the first six months of last year.

Driven by the significant increase in operations during the six months, Emirates’ EBITDA recovered to AED 5.0 billion (US$ 1.4 billion) compared to AED 290 million (US$ 79 million) for the same period last year.

dnata

dnata’s businesses in cargo and ground handling, catering and retail, and travel services saw demand return quickly wherever pandemic-related flight and travel restrictions were eased. Demonstrating the agility and capability of its highly skilled teams, dnata was able to respond quickly to customer needs with high quality services – from supporting its airline customers in reinstating flight operations safely and smoothly, to helping customers book their long-awaited travel plans.

dnata also continued to invest in critical infrastructure to deliver more efficient world class services to its customers. In the first six months of 2021-22, dnata opened a 5,000 square meter workshop dedicated to providing advanced maintenance for airside passenger buses at Dubai airport.

dnata’s revenue, including other operating income, was AED 3.7 billion (US$ 1 billion), a 55% increase compared to AED 2.4 billion (US$ 644 million) last year.

Overall profit for dnata is AED 85 million (US$ 23 million), compared to last year’s loss of AED 1.5 billion (US$ 396 million).

dnata’s airport operations remains the largest contributor to revenue with AED 2.5 billion (US$ 688 million), a 52% increase as compared to the same period last year. Across its operations, the number of aircraft handled by dnata increased sharply by 116% to 222,668, and it handled 1.4 million tonnes of cargo, up 9%.

dnata’s flight catering and retail operation, contributed AED 766 million (US$ 209 million) to its revenue, up 80%. The number of meals uplifted doubled to 16.6 million meals for the first half of the financial year after last year’s 8.3 million.

dnata’s travel division contributed AED 147 million (US$ 40 million) to revenue after AED 95 million (US$ 26 million) for the same period last year, up 55%. The division reported an underlying total transactional value (TTV) sales of AED 726 million (US$ 198 million), after an exceptional negative TTV of AED 246 million (US$ 67 million) for the same period last year which was caused by the significant volumes of refunds and pay-out in cancelled customer bookings at the beginning of the pandemic in 2020.

Top Copyright Photo: Emirates Airline Airbus A380-861 A6-EEU (msn 147) (Dubai Expo – Oct 2021 – Mar 2022) ZRH (Rolf Wallner). Image: 955680.

Emirates aircraft slide show:

Emirates aircraft photo gallery:

Emirates Group loses $6 billion in the past fiscal year, restarts service to Malta

Emirates Group made this announces:

Group records annual loss of AED 22.1 billion (US$6.0 billion) due to COVID-19 pandemic impact, its first non-profitable year in over three decades

  • Group revenue of AED 35.6 billion (US$ 9.7 billion) impacted by worldwide travel restrictions and border closures during the entire financial year
  • Results impacted by one-time impairment charges of AED 1.5 billion on Group’s non-financial assets
  • Ends year with solid cash balance of AED 19.8 billion (US$ 5.4 billion)

Emirates reports a loss of AED 20.3 billion (US$ 5.5 billion) down from AED 1.1 billion (US$ 288 million) profit in the previous year

  • Revenue declined by 66% to AED 30.9 billion (US$ 8.4 billion), due to the temporary suspension of passenger flights at its 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 reports a loss of AED 1.8 billion (US$ 496 million) down from AED 618 million (US$ 168 million) profit in the previous year

  • Revenue declined by 62% to AED 5.5 billion (US$ 1.5 billion), reflecting the pandemic impact across all business divisions in the UAE and worldwide
  • Expands global footprint with the full acquisition of Destination Asia, and the opening of new catering and retail facilities

The Emirates Group today announced its first year of loss in over 30 years caused by a significant drop in revenue, fully attributed to the impact of COVID-19 related flight and travel restrictions throughout its entire financial year 2020-21.

Released in its 2020-21 Annual Report, the Emirates Group posted a loss of AED 22.1 billion (US$ 6.0 billion) for the financial year ended 31 March 2021 compared with an AED 1.7 billion (US$ 456 million) profit for last year. The Group’s revenue was AED 35.6 billion (US$ 9.7 billion), a decline of 66% over last year’s results. The Group’s cash balance was AED 19.8 billion (US$ 5.4 billion), down 23% from last year mainly due to weak demand caused by the various pandemic related business and travel restrictions across all of the Group’s core business divisions and markets.

For the first time in the 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.

Keeping a tight control on costs, across the Group, financial obligations were restructured, contracts renegotiated, processes examined and operations consolidated. The various cost reduction initiatives returned an estimated saving of AED 7.7 billion during the year.

In 2020-21, the Group collectively invested AED 4.7 billion (US$ 1.3 billion) in new aircraft and facilities, the acquisition of companies, and the latest technologies to position the business for recovery and future growth. It also continued to invest resources towards environmental initiatives, as well as supporting communities and incubator programmes that nurture talent and innovation to drive future industry growth.

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 performance

Emirates’ total passenger and cargo capacity declined by 58% to 24.8 billion ATKMs at the end of 2020-21, due to pandemic related flight and travel restrictions including a complete suspension of commercial passenger services for nearly eight weeks as directed by the UAE government from March 25, 2020.

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.

Emirates’ order book for 200 aircraft remains unchanged at this time. 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.

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, to operations in over 120 destinations by March 31, 2021, Emirates has shown its ability to adapt and respond to challenges, and the resilience of its people and business model.

With significantly reduced and constrained capacity deployment across most markets, Emirates’ total revenue for the financial year declined 66% to AED 30.9 billion (US$ 8.4 billion). Currency fluctuations this year had no significant impact on airline revenue.

Total operating costs decreased by 46% from last financial year. Cost of ownership (depreciation and amortization) and employee cost were the two biggest cost components for the airline in 2020-21, followed by fuel, which accounted for 14% of operating costs compared to 31% in 2019-20. The airline’s fuel bill declined by 76% to AED 6.4 billion (US$ 1.7 billion) compared to the previous year, driven primarily by 69% lower uplift in line with capacity reduction.

Due to ongoing pandemic-related flight and travel restrictions, the airline reported a loss of AED 20.3 billion (US$ 5.5 billion) after last year’s AED 1.1 billion (US$ 288 million) profit, and a negative profit margin of 65.6%. This includes a one-time impairment charge of AED 710 million (US$ 193 million) mainly relating to certain aircraft which are currently grounded and are not expected to return to service before their scheduled retirement within the next financial year.

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 38.9 fils (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 invested to upgrade its signature A380 experience with new Premium Economy seats and other product enhancements. It also launched new technology platforms Emirates Partners Portal and Emirates Gateway, to better engage and serve travel trade partners.

For frequent flyers, Emirates Skywards offered generous extension on Tier status and Miles validity until 2022, and launched various initiatives to help its members earn and redeem rewards even if they are unable to immediately travel.

Emirates SkyCargo put in a stellar performance by rapidly responding to new demand in a changed global marketplace, contributing to 60% of the airline’s total transport revenue.

Emirates SkyCargo quickly scaled up operations and rebuilt its cargo network to meet strong demand from shippers who faced a capacity crunch when the pandemic forced airlines to drastically reduce flights. It supplemented its existing freighter capacity by bringing into service 19 “mini freighters” – modified Boeing 777-300ER passenger aircraft with seats in the economy cabin removed to make room for more cargo. The cargo division also introduced new loading protocols to safely utilize overhead bins and passenger seats to carry cargo.

In addition to supporting global supply chains for food, medical and other trade items, Emirates SkyCargo also tapped on its pharma capabilities and infrastructure to support the worldwide distribution of COVID-19 vaccines and humanitarian relief to Lebanon in the aftermath of the Port of Beirut explosions.

In October, Emirates SkyCargo set up a dedicated GDP-certified airside hub in Dubai for COVID-19 vaccines, and later it partnered with UNICEF to facilitate the rapid transport of COVID-19 vaccines to developing nations through Dubai.

With the strong demand in air freight throughout the year, Emirates’ cargo division reported a revenue of AED 17.1 billion (US$ 4.7 billion), an increase of 53% over last year.

Freight yield per Freight Tonne Kilometre (FTKM) increased strongly by 88%, due to the unique pandemic situation which led to significantly reduced cargo capacity in the market worldwide.

Tonnage carried decreased by 22% to reach 1.9 million tonnes, due to the reduced available bellyhold capacity for the entire year. At the end of 2020-21, Emirates’ SkyCargo’s total freighter fleet stood unchanged at 11 Boeing 777Fs.

Emirates’ hotels portfolio recorded revenue of AED 296 million (US$ 81 million), a decline of 49% over last year as the events business dried up and facilities had to shut temporarily due to the pandemic.

During the year, Emirates successfully restructured various aircraft leases and loans. The support from aviation lessors and financing partners during these challenging times reflects the financial community’s confidence in Emirates’ business model, and its mid to longer term prospects.

In addition to the AED 14.5 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 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.

In other news, Emirates resumed three weekly services to Malta via Larnaca, Cyprus, on July 14, 2021, further expanding its European network to 34 destinations, and offering customers worldwide more travel choices and enhanced connectivity via Dubai.

Flights to/from Malta will operate three times weekly through the airline’s existing Larnaca service on its two-class Boeing 777-300ER, offering 42 lie-flat seats in Business and 386 ergonomically designed seats in Economy class.

Emirates Group announces 2019-20 results, warns for this year

All photos by Emirates. Emirates’ grounded fleet at Dubai.

Emirates Group issued this financial report:

Group records 32nd consecutive year of profit of AED 1.7 billion (US$ 456 million)

  • Group revenue of AED 104 billion (US$ 28.3 billion) impacted by planned Dubai International airport (DXB) runway closure in Q1 and COVID-19 pandemic in Q4
  • Ends year with solid cash balance of AED 25.6 billion (US$ 7.0 billion)

Emirates reports a profit of AED 1.1 billion (US$ 288 million), 21% up from the previous year

  • Revenue declines by 6% to AED 92.0 billion (US$ 25.1 billion), impacted by planned 45 days DXB runway closure and temporary suspension of passenger flights in March
  • Airline capacity reduced to 59 billion ATKM with aircraft fleet size unchanged

dnata reports a profit of AED 618 million (US$ 168 million), which includes AED 216 million (US$ 59 million) one-time gain from sale of stake in an IT company, Accelya

  • Revenue increases by 2% to AED 14.8 billion (US$ 4.0 billion), reflecting business growth with international business accounting for 72% of revenue
  • Profit impacted by: goodwill impairments (mainly in Travel) of AED 164 million (US$ 45 million), write-offs due to Thomas Cook failure (Travel & Catering) of AED 96 million (US$ 26 million), and impact of COVID-19 (across all business divisions) AED 274 million (US$ 75 million)
  • Expands global footprint with addition of new facilities and service capabilities across its airport operations, and catering divisions

The Emirates Group today announced its 32nd consecutive year of profit, against a drop in revenue mainly attributed to reduced operations during the planned DXB runway closure in the first quarter, and the impact of flight and travel restrictions due to the COVID-19 pandemic in the fourth quarter.

Released today in its 2019-20 Annual Report, the Emirates Group posted a profit of AED 1.7 billion (US$ 456 million) for the financial year ended 31 March 2020, down 28% from last year. The Group’s revenue reached AED 104.0 billion (US$ 28.3 billion), a decline of 5% over last year’s results. The Group’s cash balance was AED 25.6 billion (US$ 7.0 billion), up 15% from last year mainly due to a strong business performance up to February 2020 and lower fuel cost compared to previous year.

Due to the unprecedented business environment from the ongoing pandemic, and to protect the Group’s liquidity position, the Group has not declared a dividend for this financial year after last year’s dividend of AED 500 million (US$ 136 million) to the Investment Corporation of Dubai.

His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “For the first 11 months of 2019-20, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets. However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.

“Even without a pandemic, our industry has always been vulnerable to a multitude of external factors. In 2019-20, the further strengthening of the US dollar against major currencies eroded our profits to the tune of AED 1.0 billion, global airfreight demand remained soft for most of the year, and competition intensified in our key markets.

“Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year.

“Every year we are tested on our agility and ability. While tackling the immediate challenges and taking advantage of opportunities that come our way, our decisions have always been guided by our long-term goal to build a profitable, sustainable, and responsible business based in Dubai.”

In 2019-20, the Group collectively invested AED 11.7 billion (US$ 3.2 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and employee initiatives, a decrease following last year’s record investment spend of AED 14.6 billion (US$ 3.9 billion). It also continued to invest resources towards supporting communities, environmental initiatives, as well as incubator programs that nurture talent and innovation to support future industry growth.

At the 2019 Dubai Air Show in November, Emirates placed a US$ 16 billion order for 50 A350 XWBs, and a US$ 8.8 billion order for 30 Boeing 787 Dreamliner aircraft. With first deliveries expected in 2023, these new aircraft will add to Emirates’ current fleet mix, and provide deployment flexibility within its long-haul hub model. In line with Emirates’ long-standing strategy to operate a modern and efficient fleet, these new aircraft will also keep its fleet age well below the industry average.

dnata’s key investments during the year included: the significant expansion of catering capabilities in North America with the opening of new operations in Vancouver, Houston, Boston, Los Angeles and San Francisco. dnata also completed the purchase of the remaining stake in Alpha LSG, to become sole shareholder of the UK’s biggest inflight catering, on-board retail and logistics company.

Across its more than 120 subsidiaries, the Group’s total workforce remained nearly unchanged with 105,730 employees, representing over 160 different nationalities.

Sheikh Ahmed said: “In 2019-20, we were steadfast with our cost discipline while investing to expand our business and revenues opportunities. Through ongoing reviews of our work structures and the implementation of new technology systems, we’ve improved productivity and retarded manpower cost increases. As the pandemic hit, we’ve taken all possible measures to protect our skilled workforce, and ensure the health and safety of our people and our customers. This will remain our top priority as we navigate a gradual return to operations in the coming months.”

He concluded: “The COVID-19 pandemic will have a huge impact on our 2020-21 performance, with Emirates’ passenger operations temporarily suspended since  March 25, and dnata’s businesses similarly affected by the drying up of flight traffic and travel demand all around the world. We continue to take aggressive cost management measures, and other necessary steps to safeguard our business, while planning for business resumption. We expect it will take 18 months at least, before travel demand returns to a semblance of normality. In the meantime, we are actively engaging with regulators and relevant stakeholders, as they work to define standards to ensure the health and safety of travellers and operators in a post-pandemic world. Emirates and dnata stand to reactivate our operations to serve our customers, as soon as circumstances allow.”

Emirates performance

Emirates’ total passenger and cargo capacity declined by 8% to 58.6 billion ATKMs at the end of 2019-20, due to the DXB runway closure capacity restrictions and COVID-19 impact with a complete suspension of passenger services as directed by the UAE government during March 2020.

Emirates received six new aircraft during the financial year, all A380s. During 2019-20, Emirates phased out six older aircraft comprising of four Boeing 777-300ERs, its last 777-300 and one Boeing 777 freighter leaving its total fleet count unchanged at 270 at the end of March. Emirates’ average fleet age remains at a youthful 6.8 years.

It reinforces Emirates’ strategy to operate a young and modern fleet, and live up to its “Fly Better” brand promise as modern aircraft are better for the environment, better for operations, and better for customers.

During the year, Emirates launched three new passenger routes: Porto (Portugal), Mexico City (Mexico) and Bangkok-Phnom Penh. It also supplemented its organic network growth with a new codeshare agreement signed with Spicejet that will provide Emirates customers with more connectivity options in India.

Additionally, Emirates expanded its global connectivity and customer proposition through interline agreements with: Vueling, adding connections to over 100 destinations around Europe via Barcelona, Madrid, Rome and Milan; with Turkish low-cost airline Pegasus Airline (PC), offering customers connections onto selected routes on PC’s network; and with Interjet Airlines, opening new routes for passengers travelling between Mexico, the Gulf and Middle East and beyond.

Emirates also marked two years of successful strategic partnership with flydubai. Over 5.3 million passengers have benefitted from seamless connectivity on the Emirates and flydubai network since both Dubai-based airlines began their partnership in October 2017.

While Emirates recorded a very strong revenue performance during its 2nd and 3rd quarters of 2019-20, the DXB runway closure and COVID-19 crisis in the other quarters impacted its total revenue for the financial year with a decline of 6% to AED 92.0 billion (US$ 25.1 billion). The relative strengthening of the US dollar against currencies in many of Emirates’ key markets had an AED 963 million (US$ 262 million) negative impact to the airline’s bottom line, a substantial increase compared to the previous year’s negative currency impact of AED 572 million (US$ 156 million).

Total operating costs decreased by 10% over the 2018-19 financial year. The average price of jet fuel declined by 9% during the financial year after last year’s 22% increase. Including a 6% lower uplift in line with capacity reduction, the airline’s fuel billdeclined substantially by 15% over last year to AED 26.3 billion (US$ 7.2 billion) and accounted for 31% of operating costs, compared to 32% in 2018-19. Fuel remained the biggest cost component for the airline.

Despite continued strong competitive pressure and the unfavourable currency impact, the airline reported a profit of AED 1.1 billion (US$ 288 million), an increase of 21% over last year’s results, and a profit margin of 1.1%. Profit would have been higher without a loss of AED 1.1 billion (US$ 299 million) due to fuel hedge ineffectiveness at year end.

Overall passenger traffic declined, as Emirates carried 56.2 million passengers (down 4%). With seat capacity down by 6%, the airline achieved a Passenger Seat Factor of 78.5%. The positive development in passenger seat factor compared to last year’s 76.8%, reflects the airline’s successful capacity management and positive travel demand across nearly all markets up until the outbreak of COVID-19 in the last quarter.

An increase in market fares and a favourable route mix was completely offset by the strengthening of the US dollar against most currencies and left the passenger yield unchanged at 26.2 fils (7.1 US cents) per Revenue Passenger Kilometre (RPKM).

During the year, Emirates raised a total of AED 9.3 billion (US$ 2.5 billion) in aircraft financing, funded through term loans.

Emirates secured Bpifrance (French Sovereign Export Credit Agency) Assurance Export backed financing that also combined a commercial loan tranche sourced from Korean investors for all six aircraft delivered in 2019-20.

As part of an initiative to reduce costs and benefit from the prevailing global rates environment, Emirates refinanced and repriced more than AED 5.5 billion (US$ 1.5 billion) in 2019-20, resulting in estimated overall future cost savings in excess of AED 110 million (US$ 30 million).

Emirates’ management have taken several measures to protect the Group’s cash flow through cost saving measures, reductions to discretionary capital expenditure, and engaging with our business partners in improving working capital. Additionally, we have partially drawn existing credit lines before March 31, and are in the process of securing additional lines to further improve the liquidity buffer. In the last quarter of 2019-20, Emirates successfully raised additional liquidity through term loans, revolving credit and short term trade facilities to the tune of AED 4.4 billion (US$ 1.2 billion). It will continue to tap the bank market for further liquidity in the first quarter of 2020-21 to provide a cushion against the impact of COVID-19 on the cash flows in the short term.

Emirates closed the financial year with a healthy level of AED 20.2 billion (US$ 5.5 billion) of cash assets.

Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30% of overall revenues. Europe was the highest revenue contributing region with AED 26.1 billion (US$ 7.1 billion), down 8% from 2018-19. East Asia and Australasia follows closely with AED 24.1 billion (US$ 6.6 billion), down 9%. The Americas region recorded revenue growth at AED 14.6 billion (US$ 4.0 billion), up 1%. West Asia and Indian Ocean revenue increased by 4% to AED 9.8 billion (US$ 2.7 billion). Africa revenue decreased by 4% to AED 8.7 billion (US$ 2.4 billion), whereas Gulf and Middle East revenue decreased by 8% to AED 7.7 billion (US$ 2.1 billion).

Through the year, Emirates introduced product and service improvements on board, on the ground, and online. Highlights include: the launch of Emirates’ first remote check-in terminal at Dubai’s Port Rashid to provide smooth sea-air connections for cruise travellers; the launch of EmiratesRED, our revamped inflight retail offering; and innovative enhancements to the Emirates app as customers increasingly choose to interact with us via their mobile devices.

For frequent flyers, Emirates launched Skywards Exclusives which offers access to the airline’s unique, money-can’t-buy sponsorship experiences; and Skywards Everyday, a location based app that enables members to earn Skywards Miles at more than 1,000 retail, entertainment and dining outlets across the UAE.

Emirates SkyCargo continued to deliver a solid performance in a highly competitive market, contributing to 13% of the airline’s total transport revenue.

With the lingering weakness in air freight demand over most of the year, Emirates’ cargo division reported a revenue of AED 11.2 billion (US$ 3.1 billion), a decrease of 14% over last year.

Freight yield per Freight Tonne Kilometre (FTKM), after two consecutive years of growth, declined by 2%, largely impacted by the reduction in fuel price, and a strong US dollar.

Tonnage carried decreased by 10% to reach 2.4 million tonnes, due to the capacity reduction with the retirement of one Boeing 777 freighter and reduced available bellyhold capacity in the first and last quarters of the year. At the end of 2019-20, Emirates’ SkyCargo’s total freighter fleet stood at 11 Boeing 777Fs.

Emirates SkyCargo continued to develop innovative, bespoke products. In October, it launched Emirates Delivers, an e-commerce platform that helps individual customers and small businesses consolidate online purchases in the US and have them delivered in the UAE. More origin and destination markets are being planned in the future, leveraging Dubai as a hub for regional e-commerce fulfilment. During the year, Emirates Skycargo also strengthened its pharma capabilities with the opening of new facilities in Chicago and Copenhagen.

Emirates’ hotels portfolio recorded revenue of AED 584 million (US$ 159 million), a decline of 13% over last year with competition further on the rise in the UAE market impacting average room rates and occupancy levels.

Emirates aircraft photo gallery:

Emirates suspends most passenger operations due to the coronavirus

Emirates has made this announcement:

  • Emirates retains cargo operations, but temporarily suspends most passenger operations by March 25
  • dnata significantly reduces operations, including temporary closure of operations at some international locations where demand is low
  • Group implements basic salary reduction for majority of employees for three months, will not cut jobs
  • Supports government measures to safeguard community health

Since the COVID-19 outbreak began, Emirates and dnata have been adapting operations in line with regulatory directives as well as travel demand.

The airline has aimed to maintain passenger flights for as long as feasible to help travellers return home amidst an increasing number of travel bans, restrictions, and country lockdowns across the world. It continues to maintain vital international air cargo links for economies and communities, deploying its fleet of 777 freighters for the transport of essential goods including medical supplies across the world.

With many of its airline customers dramatically reducing flights or ceasing services altogether, dnata has also significantly reduced its operations, including temporarily shutting some offices across its international network.

HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group said: “The world has literally gone into quarantine due to the COVID-19 outbreak. This is an unprecedented crisis situation in terms of breadth and scale: geographically, as well as from a health, social, and economic standpoint. Until January 2020, the Emirates Group was doing well against our current financial year targets. But COVID-19 has brought all that to a sudden and painful halt over the past 6 weeks.

“As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re-open their borders, and travel confidence returns. By Wednesday March 25, although we will still operate cargo flights which remain busy, Emirates will have temporarily suspended most of its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services.”

Having received requests from governments and customers to support the repatriation of travellers, Emirates will continue to operate passenger and cargo flights to the following countries and territories until further notice, as long as borders remain open, and there is demand: the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, USA, and Canada. The situation remains dynamic, and travellers can check flight status on emirates.com.

Sheikh Ahmed added: “Emirates Group has a strong balance sheet, and substantial cash liquidity, and we can, and will, with appropriate and timely action, survive through a prolonged period of reduced flight schedules, so that we are adequately prepared for the return to normality.”

Cost reduction measures

The Emirates Group has undertaken a series of measures to contain costs, as the outlook for travel demand remains weak across markets in the short to medium term. This includes:

  • Postponing or cancelling discretionary expenditure
  • A freeze on all non-essential recruitment and consultancy work
  • Working with suppliers to find cost savings and efficiency
  • Encouraging employees to take paid or unpaid leave in light of reduced flying capacity
  • A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%. Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction
  • Presidents of Emirates and dnata – Sir Tim Clark and Gary Chapman – will take a 100% basic salary cut for three months

On the decision to reduce basic salary, Sheikh Ahmed said: “Rather than ask employees to leave the business, we chose to implement a temporary basic salary cut as we want to protect our workforce and keep our talented and skilled people, as much as possible. We want to avoid cutting jobs. When demand picks up again, we also want to be able to quickly ramp up and resume services for our customers.”

The Emirates Group has strong liquidity, with a healthy cash position but it is prudent that it take steps to reduce costs at this time. Emirates remains committed to serving its markets and looks forward to resuming a normal flight schedule as soon as that is permitted by the relevant authorities.

Safeguarding customers, employees, and communities

Emirates Group closely monitors the situation and keeps in regular contact with all relevant authorities, so that it can implement the latest guidance to keep travellers and its employees safe and healthy.

The company has strongly discouraged its employees from non-essential travel, implemented work from home policies for all employees where operationally feasible, enhanced cleaning and disinfection protocols at its facilities, introduced temperature screening at its key office entry points, and launched internal educational campaigns on hand hygiene and health practices to reduce risk of COVID-19.

Over the past weeks, the airline has also implemented enhanced cleaning and disinfecting measures on all of its aircraft departing Dubai as a precaution, and worked closely with airports to implement screening measures as required by the local authorities.

Frontline employees such as crew and airport teams have also been provided with support to stay safe while on duty, including providing hand sanitizers and masks where required.

The Emirates Group fully supports all initiatives to safeguard the health of communities in every market where it operates, including the UAE’s national COVID-19 response.

Sheikh Ahmed said: “These are unprecedented times for the airline and travel industry, but we will get through it. Our business is taking a hit, but what matters in the long run is that we do the right thing for our customers, our employees, and the communities we serve. With the support and unity that we have seen from our employees, partners, customers, and other stakeholders, I’m confident that Emirates can tackle this challenge and come out stronger.”

Emirates aircraft photo gallery:

Emirates Group announces half-year performance for 2019-20, with AED 1.2 billion profit, 7.9% increase in passengers carried to Dubai

Emirates Airline Airbus A380-861 A6-EUA (msn 211) AMS (Ton Jochems). Image: 948121.

Emirates Group has issued this statement:

The Emirates Group has announced its half-year results for its 2019-20 financial year.

Group revenue was AED 53.3 billion (US$ 14.5 billion) for the first six months of 2019-20, down 2% from AED 54.4 billion (US$ 14.8 billion) during the same period last year. This slight revenue decline was mainly due to planned capacity reductions during the 45-day Southern Runway closure at Dubai International airport (DXB), and unfavourable currency movements in Europe, Australia, South Africa, India, and Pakistan.

Profitability was up 8% compared to the same period last year, with the Group reporting a 2019-20 half-year net profit of AED 1.2 billion (US$ 320 million). The profit improvement was primarily due to the decline in fuel prices of 9% compared to the same period last year, however the gain from lower fuel costs were partially offset by negative currency movements.

The Group’s cash position on 30th September 2019 stood at AED 23.0 billion (US$ 6.3 billion), compared to AED 22.2 billion (US$ 6.0 billion) as at 31st March 2019.

  • Group: Revenue down 2% to AED 53.3 billion (US$ 14.5 billion), and profit of AED 1.2 billion (US$ 320 million), up 8%. Results impacted by Dubai International Airport (DXB) runway closure, decline in fuel cost, unfavourable currency movements, and bankruptcy of Thomas Cook.
  • Emirates: Revenue down 3% to AED 47.3 billion (US$ 12.9 billion), and profit increase of 282% to AED 862 million (US$ 235 million). Improved seat load factor of 81.1%, up 2.3%pts, with 29.6 million passengers carried. Dubai’s strong attraction as a destination sees the airline carrying 7.9% more customers to its hub city compared to same period last year.
His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group

“The Emirates Group delivered a steady and positive performance in the first half of 2019-20, by adapting our strategies to navigate the tough trading conditions and social-political uncertainty in many markets around the world. Both Emirates and dnata worked hard to minimise the impact of the planned runway renovations at DXB on our business and on our customers. We also kept a tight rein on controllable costs and continued to drive efficiency improvement, while ensuring that our resources were deployed nimbly to capitalise on areas of opportunity.

“The lower fuel cost was a welcome respite as we saw our fuel bill drop by AED 2.0 billion compared to the same period last year. However, unfavourable currency movements wiped off approximately AED 1.2 billion from our profits.

“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins. As a Group we remain focussed on developing our business, and we will continue to invest in new capabilities that empower our people, and enable us to offer even better products, services, and experiences for our customers.”

His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group

The Emirates Group’s employee base remained unchanged compared to 31 March 2019, at an overall average staff count of 105,315. This is in line with the company’s planned capacity and business activities, and also reflects the various internal programmes to improve efficiency through the implementation of new technology and workflows.

Emirates airline

During the first six months of 2019-20, Emirates received 3 Airbus A380s, with 3 more new aircraft scheduled to be delivered before the end of the 2019-20 financial year. It also retired 6 older aircraft from its fleet with a further 2 to be returned by 31 March 2020. The airline’s long-standing strategy to invest in the most advanced wide-body aircraft enables it to improve overall efficiency, minimise its emissions footprint, and provide high quality customer experiences.

Emirates continues to offer ever better connections for its customers across the globe with just one stop in Dubai. In the first six months of its financial year, Emirates added two new passenger routes: Dubai-Bangkok-Phnom Penh, and Dubai-Porto (Portugal). As of 30 September, Emirates’ global network spanned 158 destinations in 84 countries. Its fleet stood at 267 aircraft including freighters.

Emirates also further developed its partnership with flydubai. Both airlines continued to leverage their complementary networks to optimise flight schedules and offer new city-pair connections through Dubai, as well as open new routes including Naples (Italy) and Tashkent (Uzbekistan) in the first half of 2019-20. Customers also enjoy even more benefits with a single loyalty programme under Emirates Skywards, and passengers connecting between Emirates and flydubai can experience seamless transits with 22 flydubai flights now operating from Emirates Terminal 3 at DXB.

Overall capacity during the first six months of the year declined by 7% to 29.7 billion Available Tonne Kilometres (ATKM) mainly due to the DXB runway closure and reduction in fleet during this 45-day period. Capacity measured in Available Seat Kilometres (ASKM), shrunk by 5%, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was down by 2% with average Passenger Seat Factor rising to 81.1%, compared with last year’s 78.8%.

Emirates carried 29.6 million passengers between 1 April and 30 September 2019, down 2% from the same period last year, however, passenger yield increased by 1% period-on-period. The volume of cargo uplifted at 1.2 million tonnes has decreased by 8% while yield declined by 3%. This reflects the tough business environment for air freight in the context of global trade tensions and unrest in some key cargo markets.

In the first half of the 2019-20 financial year, Emirates net profit was AED 862 million (US$ 235 million), up 282%, compared to last year. Emirates revenue, including other operating income, of AED 47.3 billion (US$ 12.9 billion) was down 3% compared with the AED 48.9 billion (US$ 13.3 billion) recorded during the same period last year. This result was driven by increased agility in capacity deployment, with healthy customer demand for Emirates’ products driving improved seat load factors and better margins.

Emirates operating costs shrunk by 8% against the overall capacity decrease of 7%. On average, fuel costs were 13% lower compared to the same period last year, this was largely due to a decrease in oil prices (down 9% compared to same period last year), as well as a lower fuel uplift due to reduced capacity during 45-day runway closure at DXB. Fuel remained the largest component of the airline’s cost, accounting for 32% of operating costs compared with 33% in the first six months of last year.

Top Copyright Photo: Emirates Airline Airbus A380-861 A6-EUA (msn 211) AMS (Ton Jochems). Image: 948121.

Emirates aircraft slide show:

Emirates Group announces its 2018-19 results

Emirates Group recorded its 31st consecutive year of profit of AED 2.3 billion (US$631 million)

  • Strong business growth leading to a record revenue of more than AED 109 billion (US$ 29.8 billion)
  • Solid cash balance of AED 22.2 billion (US$6.0 billion)
  • Declares a dividend of AED 500 million (US$136 million) to the Investment Corporation of Dubai.

Emirates reports a profit of AED 871 million (US$237 million), 69% down from the previous year

  • Revenue increases by 6% to AED 97.9 billion (US$26.7 billion), supported by steady passenger and cargo performance
  • Airline capacity crosses 63 billion ATKM with a net addition of 2 new aircraft to the fleet

dnata makes record profit of AED 1.4 billion (US$394 million), which includes AED 321 million (US$ 88 million) gain from one-time sale of HRG stake

  • Revenue increases by 10% to AED 14.4 billion (US$3.9 billion), reflecting further business expansion with international business now accounting for 70% of revenue
  • Expands global footprint with acquisition of Qantas catering in Australia and 121 Inflight catering business in the Americas, adds new facilities and service capabilities across its airport operations, catering, and travel services divisions

The Emirates Group on May 9 announced its 31st consecutive year of profit and steady business expansion.

Released today in its 2018-19 Annual Report, the Emirates Group posted a profit of AED 2.3 billion (US$631 million) for the financial year ended March 31, 2019, down 44% from last year. The Group’s revenue reached AED 109.3 billion (US$29.8 billion), an increase of 7% over last year’s results. The Group’s cash balance was AED 22.2 billion (US$6.0 billion), down 13% from last year mainly due to large investments into the business, including significant acquisitions and payment of last year’s AED 2 billion (US$ 545 million) dividend.

In line with the overall profit, the Group declared a dividend of AED 500 million (US$136 million) to the Investment Corporation of Dubai for 2018-19.

His Highness (H.H.) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “2018-19 has been tough, and our performance was not as strong as we would have liked. Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets. The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates.

“Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities. Our goal has always been to build a profitable, sustainable, and responsible business based in Dubai, and these principles continue to guide our decisions and investments. In 2018-19, Emirates and dnata delivered our 31st consecutive year of profit, recorded growth across the business, and invested in initiatives and infrastructure that will secure our future success.”

In 2018-19, the Group collectively invested AED 14.6 billion (US$ 3.9 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and staff initiatives, a significant increase over last year’s investment spend of AED 9.0 billion (US$ 2.5 billion).

In February, Emirates announced a commitment for 40 A330-900s and 30 A350-900s worth US$ 21.4 billion at list prices in an agreement signed with Airbus, to be delivered from 2021 and 2024 respectively. The airline will also receive 14 more A380 deliveries from 2019 until the end of 2021, taking its total A380 order book to 123 units.

dnata’s key investments during the year included: the acquisitions of Q Catering and Snap Fresh in Australia, and 121 Inflight Catering in the US; the buy-out of shares to become the owner of Dubai Express, Freightworks LLC; and a 51% majority stakeholder of Bolloré Logistics LLC, UAE; the build of new cargo and pharma handling facilities in Belgium, the US, the UK, the Netherlands, Australia, Singapore and Pakistan; the acquisition of German tour operator Tropo, and a majority stake in BD4travel, a company providing artificial intelligence driven IT solutions in the travel sector.

Across its more than 120 subsidiaries, the Group’s total workforce increased by 2% to 105,286, representing over 160 different nationalities, mainly influenced by dnata’s new acquisitions and its international business expansion.

Sheikh Ahmed said: “In 2018-19, we were steadfast with our cost discipline while expanding our business and growing revenues. By slowing the recruitment of non-operational roles, and implementing new technology systems and new work structures, we’ve improved productivity and retarded manpower cost increases.”

He concluded: “It’s hard to predict the year ahead, but both Emirates and dnata are well positioned to navigate speed bumps, as well as to compete and succeed in the global marketplace. We must continually up our game, that’s why we invest in our people, technology, and infrastructure to help us maintain our competitive edge. As a responsible business, we also invest resources towards supporting communities, conservation and environmental initiatives, as well as incubating talent and innovation that will propel our industry in the future.”

Emirates performance

Emirates’ total passenger and cargo capacity crossed the 63 billion mark, to 63.3 billion ATKMs at the end of 2018-19, cementing its position as the world’s largest international carrier. The airline moderately increased capacity during the year over 2017-18 by 3%, with a focus on yield improvement.

Emirates received 13 new aircraft during the financial year, comprising of seven A380s and six Boeing 777-300ERs, including the last 777-300ER on its order book. The next 777 delivery is planned for 2020, when Emirates receives its first 777X aircraft.

During 2018-19, Emirates phased out 11 older aircraft, bringing its total fleet count to 270 at the end of March. This fleet roll-over involving 24 aircraft was again one of the largest managed in a year, keeping Emirates’ average fleet age at a youthful 6.1 years.

It reinforces Emirates’ strategy to operate a young and modern fleet, and live up to its “Fly Better” brand promise as modern aircraft are better for the environment, better for operations, and better for customers.

During the year, Emirates launched three new passenger destinations: London Stansted (UK), Santiago (Chile) and Edinburgh (Scotland), and reinstated services to Sabiha Gokcen (Turkey). It also added flight capacity to 14 existing destinations and upgraded capacity to six cities, offering customers more choice of flight timings and onward connections.

Supplementing its organic network growth, Emirates expanded its global connectivity and customer proposition through new codeshare agreements signed with Jetstar Pacific and China Southern Airlines. It also enhanced its commercial strategic partnership with South African Airways.

The Emirates-flydubai partnership continued to develop, with Emirates customers now able to access 67 more destinations served by flydubai, and enjoy greater connectivity with 11 flydubai flights operating from Emirates Terminal 3. The partnership alignment also saw Emirates Skywards become the loyalty programme for both Emirates and flydubai.

Despite stiff competition across its key markets, Emirates increased its revenue by 6% to AED 97.9 billion (US$ 26.7 billion). The relative strengthening of the US dollar against currencies in many of Emirates’ key markets had an AED 572 million (US$ 156 million) negative impact to the airline’s bottom line, a stark contrast to the previous year’s positive currency impact of AED 661 million (US$ 180 million).

Total operating costs increased by 8% over the 2017-18 financial year. The average price of jet fuel climbed by a further 22% during the financial year after last year’s 15% increase. Including a 3% higher uplift in line with capacity increase, the airline’s fuel bill increased substantially by 25% over last year to AED 30.8 billion (US$ 8.4 billion). This is the biggest-ever fuel bill for the airline, accounting for 32% of operating costs, compared to 28% in 2017-18. Fuel remained the biggest cost component for the airline.

Against a backdrop of high fuel prices, strong competitive pressure, and unfavourable currency impact, the airline reported a profit of AED 871 million (US$ 237 million), a decline of 69% over last year’s results, and a profitmargin of 0.9%.

Overall passenger traffic remained steady, as Emirates carried 58.6 million passengers (up 0.2%). With seat capacity increasing by 4%, the airline achieved a Passenger Seat Factor of 76.8%. The slight decline in passenger seat factor compared to last year’s 77.5%, reflects the impact of slowing regional economies on travel demand, and strong competition in many markets.

An increase in market fares and a favourable class mix helped support a passenger yield increase of more than 3% to 26.2 fils (7.1 US cents) per Revenue Passenger Kilometre (RPKM), although the full impact was partly offset by the strengthening of the US dollar against most currencies.

During the year, Emirates raised AED 14.2 billion (US$ 3.9 billion) to fund its fleet growth, using a combination of term loans, finance and operating leases.

Testament to the increasing depth of the Japanese structured financing market for Emirates, all six 777-300ER aircraft delivered were financed via a Japanese Operating Lease with a Call Option (JOLCO) raising funding of more than US$ 1 billion. Emirates has now raised over AED 28 billion (US$ 7.6 billion) from the Japanese structured financing market since 2014.

A US$ 600 million corporate Sukuk issued in March 2018 financed 2 A380 deliveries; and the remaining 5 A380 aircraft were taken on a mix of operating lease, Export Credit Agency (ECA) backed finance leases, and finance leases arranged from institutional investors and bank base from Korea, Germany, UK and Middle East.

These deals demonstrate Emirates’ ability to unlock diverse financing sources through access to global liquidity, underscoring its sound financials and the strong investor confidence in the airline’s business model.

Emirates closed the financial year with a healthy level of AED 17.0 billion (US$ 4.6 billion) of cash assets.

Revenue generated from across Emirates’ six regions continues to be well balanced, with no region contributing more than 30% of overall revenues. Europe was the highest revenue contributing region with AED 28.3 billion (US$ 7.7 billion), up 6% from 2017-18. East Asia and Australasia follows closely with AED 26.6 billion (US$ 7.2 billion), up 5%. The Americas region recorded revenue growth at AED 14.5 billion (US$ 3.9 billion), up 8%. Africa revenue increased by 9% to AED 10.2 billion (US$ 2.8 billion), whereas Gulf and Middle East revenue decreased by 3% to AED 8.3 billion (US$ 2.3 billion). West Asia and Indian Ocean revenue increased by 6% to AED 8.1 billion (US$ 2.2 billion).

Through the year, Emirates introduced product and service improvements on board, on the ground, and online.

Highlights include: the completion of a US$ 150 million programme to refurbish its entire Boeing 777-200LR fleet with new, wider Business Class seats and a fully refreshed Economy Class cabin; the launch of the Emirates Vintage Collection featuring fine wines that have been stored for 15 years; and new luxury products in First and Business Class developed in collaboration with brands like Bowers & Wilkins, Bulgari and BYREDO.

On the ground, Emirates introduced a new service so customers in Dubai can check-in for their flights from their homes, hotel or office, and have their luggage transported prior to their flight; it added a new dedicated lounge in Cairo and refurbished the existing Emirates Lounges in New York and Rome; and launched pilot trials for the world’s first ‘biometric path’ at Dubai airport utilising the latest biometric technology to ease Emirates passengers through check-in, immigration formalities, and boarding.

Online, Emirates became the first airline to launch 3D seat models using web-based virtual reality technology, allowing customers to preview its onboard product and select seats. It also launched a new feature on its mobile app, so customers can browse the thousands of movies, music and shows on offer, create personal playlists before they fly, and then sync from their devices to their personal seatback screens when they board.

Emirates SkyCargo continued to deliver a strong performance in a highly competitive market with dampening demand, contributing to 14% of the airline’s total transport revenue.

In an airfreight market facing unrelenting downward pressure on yields and slowing demand, Emirates’ cargo division reported a revenue of AED 13.1 billion (US$ 3.6 billion), an increase of 5% over last year, while tonnagecarried slightly increased by 1% to reach 2.7 million tonnes.

Freight yield per Freight Tonne Kilometre (FTKM) for the 2nd consecutive year increased by a further 3%, demonstrating Emirates SkyCargo’s ability to retain and win customers on value despite fuel price increases, and a weakened demand in many markets.

Emirates’ SkyCargo’s total freighter fleet stood at 12 Boeing 777Fs. In addition to belly-hold capacity to Emirates’ new passenger destinations, Emirates SkyCargo launched a new freighter service to Bogota (Columbia), and resumed freighter services to Erbil (Iraq).

Emirates SkyCargo continued to develop innovative, bespoke products tailored to key industry sectors. In April, it launched Emirates AOG, a new airfreight product designed to transport aircraft parts quickly across the globe. This was followed in August by the launch of Emirates Pets and Emirates Pets Plus, which are new and enhanced air transportation products to ensure the safety and comfort of pets with services such as veterinary checks, document clearances, door-to-door transport, and the booking of return flights for pets.

Emirates’ hotels recorded revenue of AED 669 million (US$ 182 million), a decline of 10% over last year with competition further on the rise in the UAE market impacting average room rates and occupancy levels.

Emirates Group announces half-year performance for 2018-19

Emirates Airline Airbus A380-861 A6-EDD (msn 020) JFK (Fred Freketic). Image: 944350.

  • Group: Revenue up 10% to AED 54.4 billion (US$14.8 billion), and profit of AED 1.1 billion (US$296 million), down 53%. Results impacted by significant increase in fuel cost, unfavourable currency movements, and one-time transaction in dnata.
  • Emirates: Revenue up 10% to AED 48.9 billion (US$13.3 billion), and profit decline of 86% to AED 226 million (US$62 million). 30.1 million passengers carried, up 3%, on overall capacity expansion of 3%. Dubai’s attraction as a destination remains strong with the airline carrying 9% more customers to its hub city.
  • dnata: Revenue up 11% to AED 7.0 billion (US$1.9 billion), profit up 31% to AED 861 million (US$235 million) includes gain of AED 320 million from one-time transaction. Without this transaction, the profit recorded would be down 18% compared to last year. 350,052 aircraft handled, up 6%, 1.5 million tonnes of cargo handled, up 2%.

The Emirates Group has announced its half-year results for 2018-19. The Group saw steady revenue growth compared to the same period last year, however profits were impacted by the significant rise in oil prices, and unfavourable currency movements in certain markets, amidst other challenges for the airline and travel industry.

The Emirates Group revenue was AED 54.4 billion (US$ 14.8 billion) for the first six months of its 2018-19 financial year, up 10% from AED 49.4 billion (US$ 13.5 billion) during the same period last year.

Profitability was down 53% compared to the same period last year, with the Group reporting a 2018-19 half-year net profit of AED 1.1 billion (US$296 million). The profit erosion was primarily due to the significant increase in fuel prices of 37% compared to the same period last year, as well as the negative impact of currencies in certain markets.

The Group’s cash position on September 30, 2018 was at AED 21.5 billion (US$ 5.9 billion), compared to AED 25.4 billion (US$6.9 billion) as at 31st March 2018.

His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: “Emirates and dnata grew steadily in the first half of 2018-19. Demand for our high quality products and services remained healthy, as we won new and return customers across our businesses and this is reflected in our revenue performance. However, the high fuel cost as well as currency devaluations in markets like India, Brazil, Angola and Iran, wiped approximately AED 4.6 billion from our profits.

“We are proactively managing the myriad challenges faced by the airline and travel industry, including the relentless downward pressure on yields, and uncertain economic and political realities in our region and in other parts of the world. We are keeping a tight rein on controllable costs and will continue to drive efficiency improvement through the implementation of new technology and business processes.

“The next six months will be tough, but the Emirates Group’s foundations remain strong. I’m pleased to note that our home and hub in Dubai continues to attract travel demand, as the airline saw 9% more customers enjoying Dubai as a destination in the first half of 2018-19 compared to the same period last year. We expect this demand to remain healthy as new attractions come online and the city gears up for Dubai Expo 2020. Moving forward we are firmly focussed on sustaining our business. We will do this by being agile to capitalise on opportunities, and investing to serve our customers even better with high quality products that they value.”

In the past six months, the Group’s employee base reduced by 1% compared to 31 March 2018, from an overall average staff count of 103,363 to 101,983. This was largely a result of natural attrition, together with a slower pace of recruitment as the business continues its various internal programmes to improve efficiency through the implementation of new technology and workflows.

Emirates Airline

During the first six months of 2018-19, Emirates received 8 wide-body aircraft – 3 Airbus A380s, and 5 Boeing 777s, with 5 more new aircraft scheduled to be delivered before the end of the financial year. It also retired 7 older aircraft from its fleet with further 4 to be returned by March 31, 2019. The airline’s long-standing strategy to invest in the most advanced wide-body aircraft enables it to improve overall efficiency and provide better customer experiences.

Emirates continues to offer ever better connections for its customers across the globe with just one stop in Dubai.

In the first six months of its financial year, Emirates launched new passenger services to Stansted (UK) and Santiago (Chile).  It also introduced a new linked service from Dubai via Bali to Auckland. As of 30 September, Emirates’ global network spanned 161 destinations in 85 countries. Its fleet stood at 269 aircraft including freighters.

Emirates further developed its partnership with flydubai, offering customers even more benefits as both airlines combined their loyalty programme under Emirates Skywards.  Customers also enjoy new flight choices as Emirates and flydubai continued to leverage their complementary networks to optimise flight schedules and offer new city-pair connections through Dubai, as well as open new routes including Kinshasa (Congo), Krakow (Poland), and Catania (Italy) in the first half of 2018-19.

Overall capacity during the first six months of the year increased a modest 3% to 31.8 billion Available Tonne Kilometres (ATKM). Capacity measured in Available Seat Kilometres (ASKM), grew by 4%, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was up 6% with average Passenger Seat Factor rising to 78.8%, compared with last year’s 77.2%.

Emirates carried 30.1 million passengers between 1 April and 30 September 2018, up 3% from the same period last year. The volume of cargo uplifted at 1.3 million tonnes is largely unchanged while yield improved by a healthy 11% .This performance is the result of Emirates SkyCargo’s focussed investments in products and services tailored to key sectors, which gives it a strong competitive edge in a recovering global air freight market.

In the first half of the 2018-19 financial year, Emirates net profit is AED 226 million (US$62 million), down 86%, compared to last year. Emirates revenue, including other operating income, of AED 48.9 billion (US$ 13.3 billion) was up 10% compared with the AED 44.5 billion (US$ 12.1 billion) recorded during the same period last year. This result was driven by increased agility in capacity deployment, and improved seat load factors despite fare increases reflect the healthy customer demand for Emirates’ products.

Emirates operating costs grew by 13% against the overall capacity increase of 3%. On average, fuel costs were 42% higher compared to the same period last year, this was largely due to an increase in oil prices (up 37% compared to same period last year), as well as an increase in fuel uplift of 4% due to Emirates’ expanding fleet operations. Fuel remained the largest component of the airline’s cost, accounting for 33% of operating costs compared with 26% in the first six months of last year.

Top Copyright Photo (all others by Emirates): Emirates Airline Airbus A380-861 A6-EDD (msn 020) JFK (Fred Freketic). Image: 944350.

Emirates aircraft slide show:

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