Emirates reports Sh646bn loss, its first in 30 years

 

Global airline company, Emirates Group, has reported a $6 billion (Sh646 billion) loss in the Financial Year to March 31, 2021 results - the first loss in over 30 years, due to the impact of Covid-19. This figure is a drop from the Sh49 billion profit the group registered last year.

Of the loss, $5.5 billion (Sh592 billion) was reported by Emirates, the airline arm of the group, which last year made a $288 million (Sh31 billion) profit. The airline’s revenues declined by 66 per cent to $8.4 billion (Sh905 billion). This loss is close to 20 times the Sh36 billion loss Kenya’s national carrier, Kenya Airways, incurred in 2020.

The group cited flight and travel restrictions that dominated last year since the onset of Covid-19 for the performance, causing suspension of flights that shrunk its total revenues to $9.7 billion (Sh1.045 trillion).

“The Group’s cash balance was AED 19.8 billion (US$ 5.4 billion), down 23 per cent 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,” the Dubai-based company said in a statement today.

The group said it had resorted to preserving cash and controlling costs over the year as governments placed restrictions to prevent the spread of Covid-19.

“In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions,” said Group Chairman and CEO, Sheikh Ahmed bin Saeed Al Maktoum.

Reduced workforce

He said the group received a $3.1 billion from the Government of Dubai, its ultimate shareholder over the year.

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

“For the first time in the Group’s history, redundancies were implemented across all parts of the business. As a result, the Group’s total workforce reduced by 31 per cent to 75,145 employees,” the group stated.

The group also said it had to restructure its financial obligations, renegotiate contracts and consolidate operations as a cost control measure.

“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,” Sheikh Ahmed said.

Cargo operations

Emirates' total passenger and cargo capacity declined by 58 per cent to 24.8 billion ATKMs. The UAE government suspended commercial passenger services for about eight weeks since March 25, 2020.

Over the year, Emirates - the airline - phased out 14 older aircraft and received three new A380 aircraft. The airline controls a fleet of 200 aircraft.

The airline reported that its total operating costs decreased by 46 per cent compared to last year, while fuel bill declined by 76 per cent to $1.7 billion.

“Emirates carried 6.6 million passengers (down 88 per cent) in 2020-21, with seat capacity down by 83 per cent. The airline reports a Passenger Seat Factor of 44.3 per cent, compared with last year’s passenger seat factor of 78.5 per cent,” the group stated.

The airline’s cargo operations were, however, resilient recording a revenue of $4.7 billion over the year, an increase of 53 per cent over the previous year, due to a rise in demand for freight services.

“Tonnage carried decreased by 22 per cent 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,” the group stated.      BY DAILY NATION