Dubai-based Emirates airline on Tuesday posted a $5.5 billion annual loss, its first in more than three decades after the coronavirus pandemic devastated the aviation industry.
The carrier, which had made a $288m profit in the previous financial year, said annual revenue fell 66 % to $8.4bn to the end of March as capacity declined by 58 %. The group was hit hard by travel restrictions, including the United Arab Emirates’ suspension of passenger services for almost two months from March 2020.
The international airline carried 6.6m passengers in 2020-21, down 88 % compared with the previous financial year. However, Emirates gradually restored its passenger network from mid-June to more than 120 destinations by the end of March.
“The Emirates group was hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions. No one knows when the pandemic will be over, but we know recovery will be patchy,” the chairman and chief executive of the group, Sheikh Ahmed bin Saeed Al Maktoum.
The international courier’s cash balance was AED 19.8 billion (US$ 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. Consequently, the group resulted in preserving cash and controlling costs over the year as governments placed restrictions to prevent the spread of COVID-19.
Emirates Group, which also includes aircraft ground services, posted a loss of $6bn, compared with a $456m profit for the previous financial year. The group’s cash position declined by about $1.6bn to $5.4bn over the year.
The airline received an injection of $3.1bn from the government to remain afloat. However, redundancies had to be implemented across all aspects of its business to reduce costs in line with resulting in a reduced capacity of staff members by 31% to about 75,000
Additionally, the airline also restructured financial obligations and renegotiated contracts resulting in savings of about $2.1bn.
“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.