The Emirates Group has announced its half-year results for its 2020-21 financial year.

Group revenue was AED 13.7 billion (US$ 3.7 billion) for the first six months of 2020-21, down 74% from AED 53.3 billion (US$ 14.5 billion) during the same period last year. This dramatic revenue decline was due to the COVID-19 pandemic which brought global air passenger travel to a halt for many weeks as countries closed their borders and imposed travel restrictions. As part of pandemic containment measures, Emirates and dnata’s hub in Dubai also suspended scheduled passenger flights for 8 weeks during April and May.

The Group is reporting a 2020-21 half-year net loss of AED 14.1 billion (US$3.8 billion).

The Group’s cash position on 30 September 2020 stood at AED 20.7 billion (US$ 5.6 billion), compared to AED 25.6 billion (US$ 7.0 billion) as at 31 March 2020.

His Highness (HH) Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group said: “We began our current financial year amid a global lockdown when air passenger traffic was at a literal standstill. In this unprecedented situation for the aviation and travel industry, the Emirates Group recorded a half-year loss for the first time in over 30 years.

“As passenger traffic disappeared, Emirates and dnata have been able to rapidly pivot to serve cargo demand and other pockets of opportunity. This has helped us recover our revenues from zero to 26% of our position same time last year.

“The Emirates Group’s resilience in the face of current headwinds is testimony to the strength of our business model, and our years of continued investment in skills, technology and infrastructure which are now paying off in terms of cost and operational efficiency. Emirates and dnata have also built strong brands and agile digital capabilities which continue to serve us well, and enabled us to respond adeptly to the accelerated shift of customer and business activities online over the past 6 months.”

The Emirates Group’s employee base, compared to 31 March 2020, is substantially reduced by 24% to an overall count of 81,334 as at 30 September 2020. This is in line with the company’s expected capacity and business activities in the foreseeable future and general industry outlook. Emirates and dnata continue to look at every means to protect its skilled workforce, including participating in job saver programmes where these exist.

Emirates airline

During the first six months of 2020-21, Emirates retired 3 older aircraft from its fleet as part of its long-standing strategy to improve overall efficiency, minimise its emissions footprint, and provide high quality customer experiences.

As directed by the UAE General Civil Aviation Authority, Emirates temporarily suspended passenger flights on 25 March and worked closely with governments and embassies to operate repatriation services until Dubai International airport (DXB) re-opened for transit passengers and later for scheduled passenger flights. The airline also partnered with the health authorities to implement comprehensive pandemic health and safety measures onboard and on the ground, to safeguard its customers, employees and the communities it serves.

The airline also took its customer commitment to the next level, by expediting refunds, offering rebooking flexibility, setting up a COVID-19 travel information hub on its website to offer the latest updates on ever-changing travel requirements, and by launching the industry’s first COVID-19 medical cover for all passengers at no additional cost.

Emirates gradually restarted scheduled passenger operations on 21 May. By 30 September, the airline was operating passenger and cargo services to 104 cities.

Overall capacity during the first six months of the year declined by 67% to 9.8 billion Available Tonne Kilometres (ATKM) due to a substantially reduced flight programme over the past months, including the suspension of passenger flights at Dubai international airport for 8 weeks. Capacity measured in Available Seat Kilometres (ASKM), shrunk by 91%, whilst passenger traffic carried measured in Revenue Passenger Kilometres (RPKM) was down by 96% with average Passenger Seat Factor falling to 38.6%, compared with last year’s pre-pandemic figure of 81.1%.

Emirates carried 1.5 million passengers between 1 April and 30 September 2020, down 95% from the same period last year. The volume of cargo uplifted at 0.8 million tonnes has decreased by 35% while yield has more than doubled by 106%. This reflects the extraordinary market situation for air freight during the global COVID-19 crisis, where drastically reduced passenger flights led to limited available capacity while airfreight demand rose strongly.

Emirates was able to uplift 65% of its cargo volumes compared to the same period last year, which shows its cargo division’s outstanding agility in adapting its operations to provide air freight services in this new environment. In a very short time, Emirates Skycargo completed the partial retrofit of 10 Boeing 777-300ER passenger aircraft to transport freight on the main deck, introduced new operation protocols to enable the safe uplift of cargo in passenger cabins, rapidly restarted and scaled up its global cargo network, and put in place comprehensive bio-safety protocols for employees.

In the first half of the 2020-21 financial year, Emirates loss was AED 12.6 billion (US$ 3.4 billion), compared to last year’s profit of AED 862 million (US$ 235 million). Emirates revenue, including other operating income, of AED 11.7 billion (US$ 3.2 billion) was down 75% compared with the AED 47.3 billion (US$ 12.9 billion) recorded during the same period last year. This result was due to severe flight and travel restrictions around the world relating to the COVID-19 pandemic.

Emirates operating costs reduced by 52% against the overall capacity decrease of 67%. Fuel costs were 83% lower compared to the same period last year. This was due to a decrease in oil prices (down 49% compared to same period last year), as well as a 76% lower fuel uplift from substantially reduced flight operations during the six months period up to end of September. Fuel, which was the always the largest component of the airline’s cost in past reporting cycles, only accounted for 11% of operating costs compared with 32% in the first six months of last year.

Despite the significant drop in operations during the six months, Emirates’ EBITDA stood positive at AED 290 million (US$ 79 million) compared to AED 13.2 billion (US$ 3.6 billion) for the same period last year.

dnata

dnata’s businesses in ground handling, catering and travel services were heavily impacted by the COVID-19 pandemic as customer airlines cut their flight schedules and service requirements or suspended operations entirely, and dynamic border restrictions around the world curbed travel demand and bookings.

Where eligible, dnata participated in job saver and other government support programmes. This included retraining employees and redeploying them in other essential industries with labour shortfalls during the pandemic. dnata also introduced new flexible work models in markets where it was possible to do so, in order to retain more of its skilled workforce.

Robust airfreight traffic across markets was a bright spot for dnata’s airport operations which responded nimbly to meet customer demand. Across its business divisions, dnata implemented enhanced health and safety measures to safeguard employees and communities, and recalibrated its products and services to meet new client requirements. It also tapped on opportunities in markets as these arose, for instance partnering with healthcare providers to offer airline passengers pre-travel COVID-19 PCR tests as part of its home check-in services.

dnata’s revenue, including other operating income, was AED 2.4 billion (US$ 644 million), a 68% decline compared to AED 7.4 billion (US$ 2.0 billion) last year.

Overall loss for dnata is AED 1.5 billion (US$ 396 million), compared to last year’s profit of AED 311 million (US$ 85 million). This figure includes impairment charges of AED 689 million across dnata’s international business divisions, mainly pertaining to goodwill.

dnata’s airport operations remains the largest contributor to revenue with AED 1.7 billion (US$ 454 million), a 54% decline as compared to the same period last year. Across its operations, the number of aircraft handled by dnata declined sharply by 71% to 102,917, and it handled 1.3 million tonnes of cargo, down 12% only.

dnata’s travel division contributed AED 95 million (US$ 26 million) to revenue after AED 1.8 billion (US$ 488 million) for the same period last year, down 95%. The division reported a negative underlying total transactional value sales of AED 246 million (US$ 67 million) for the first time, after a positive contribution of AED 5.9 billion (US$ 1.6 billion) for the same period last year. This reflects the significant refund volume and pay-out in cancelled customer bookings mainly during the beginning of the pandemic.

dnata’s flight catering operation, contributed AED 426m (US$ 116m) to its total revenue, down 76%. The number of meals uplifted declined by 84% to 8.3 million meals for the first half of the financial year after last year’s 51.9m record performance.

Emirates SkyCargo has started utilizing its Airbus A380 aircraft on select cargo charter operations to transport urgently required cargo across its network. The first dedicated Emirates A380 ‘mini-freighter’ successfully transported medical supplies between Seoul and Amsterdam via Dubai.

Working collaboratively with the Engineering and Flight Operations teams within Emirates, the air cargo carrier has optimised the cargo capacity of the Airbus A380 to safely transport around 50 tonnes of cargo per flight in the bellyhold of the aircraft.

Emirates SkyCargo has introduced dedicated cargo operations on the A380 aircraft in response to the surge in the demand for air cargo capacity required for the urgent transportation of critical goods, including medical supplies for combatting COVID-19 in regions experiencing a second wave of the pandemic.

Emirates SkyCargo is working on further optimising the capacity of its Airbus A380 aircraft through measures such as seat loading of cargo and has planned more dedicated cargo flights on aircraft for the month of November.

A leading player in the global air cargo industry with a destination network spread across six continents, Emirates SkyCargo has continued to introduce innovative cargo solutions in line with rapidly evolving market conditions since the start of the COVID-19 pandemic.

The freight division of Emirates offers a variety of options for cargo capacity and connectivity to best match its customers’ requirements. Emirates SkyCargo operates dedicated cargo flights on its Boeing 777F and its Boeing 777-300ER aircraft including 14 modified Boeing 777-300ER passenger aircraft with seats removed from Economy Class for additional cargo volume.

Through its responsiveness and agility, the air cargo carrier has been able to maintain the flow of essential goods and trade across international markets during the pandemic, often providing a much required helpline to communities around the world.

Taking a lead in the supply chain for the global distribution of a COVID-19 vaccine, Emirates SkyCargo announced recently that it set up the world’s largest EU GDP compliant airside hub in Dubai dedicated for the COVID-19 vaccine. In addition to world-class fit for purpose infrastructure for the storage of the vaccine, the facility would also be able to offer value added services such as repackaging, re-icing and redistribution of the vaccine. The air cargo carrier has also set up a rapid response team to coordinate requests for the movement of the vaccine.

Emirates SkyCargo currently offers cargo capacity on scheduled flights to 135 destinations across the world.