Emirates Group Reports Half Year Net Loss of $3.8 Billion for 2020
Revenues down 74% to $3.7 billion
The Emirates Group has announced its half-year results for its 2020-21 financial year.
Group revenue was $3.7 billion for the first six months of 2020-21, down 74% from $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 $3.8 billion.
The Group’s cash position on 30 September 2020 stood at $5.6 billion, compared to $7.0 billion as at 31 March 2020.
His Highness 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.
“We would like to thank our customers for their continued support, and express our appreciation for the combined stakeholder efforts that have made it possible for Dubai to resume aviation and other economic activity so quickly and safely.
"No one can predict the future, but we expect a steep recovery in travel demand once a COVID-19 vaccine is available, and we are readying ourselves to serve that rebound.
"In the meantime, Emirates and dnata remain responsive in deploying resources to serve our customers and meet demand.
“We have been able to tap on our own strong cash reserves, and through our shareholder and the broader financial community, we continue to ensure we have access to sufficient funding to sustain the business and see us through this challenging period.
In the first half of 2020-21, our shareholders injected $2 billion into Emirates by way of an equity investment and they will support us on our recovery path.”
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.
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.
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 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.
Despite the significant drop in operations during the six months, Emirates’ EBITDA stood positive at $79 million compared to $3.6 billion for the same period last year.
dnata’s businesses in ground handling, catering and travel services were heavily impacted by the COVID-19 pandemic as customer airlines drastically cut their flight schedules and service requirements.
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.
Robust airfreight traffic across markets was a bright spot for dnata’s airport operations which responded nimbly to meet customer demand.
dnata’s revenue, including other operating income, was $644 million, a 68% decline compared to $2.0 billion last year.
Overall loss for dnata is $396 million, compared to last year’s profit of $85 million.