Emirates has been one of the most reliably profitable airlines up until last year, yet even it has been unable to avert falling into the red over the past twelve months.
The annual results of the Emirates Group, which were published on Tuesday, June 15, saw it make a loss of AED*22.1bn for the year whilst revenue fell by 65.8% to AED 35.6bn. The loss was amplified by a non-financial impairment charge of AED 1.5bn and the company retains a strong cash position, however, the financial numbers do seem alarming. The group had a negative operating margin of 47.4%. Both elements of the group, the Emirates airline and the dnata airport services company, suffered similarly.
It is not hard to understand why. Passenger volumes over the year fell by 88.3%, which even though the Emirates fleet of aircraft measured in air tonne-kilometres shrank by 57.7%, utilisation still suffered. The number of aircraft operated by Emirates has fallen by 11 planes and now stands at 259. However, the airline has just taken delivery of 3 new A380's so capacity in 2022 may well begin to rise again.
Unsurprisingly Emirates Group has had to receive help from the State, in this case, the Government of Dubai, which injected "total relief of nearly AED 800m in 2020-21".
In common with many other airlines, Emirates' cargo operation was transformed over the past year. The company described how their "cargo operations contributed 60% of the airline's total transport revenue this year with a strong performance." Of course, like so many airlines, Emirates saw cargo volumes fall by 8.3% to 2.7m tonnes. However, what undoubtedly happened was that the profit per tonne increased substantially. Like so many airlines, its cargo operations have helped with the survival of Emirates.
The near term remains uncertain for Emirates, however, Sheikh Ahmed Al Maktoum Chief Executive Emirates Airline & Group commented that the company will stick to its previous business model but that "no one knows when this pandemic will be over, but one thing is certain – recovery will be patchy. Economies and companies that are better prepared, and those who entered pandemic times in a strong position, will be better placed to bounce back".
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