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Emirates Reports Fiscal Year Results, Looks to Late 2021 for Recovery
The Emirates Group — the Dubai, United Arab Emirates-based, state-owned international aviation company — released 2019-2020 financial results on May 10. According to the annual report released Sunday, which covers the period from April 1, 2019, to March 31, the group reported a profit of $456 million, which is a significant drop compared to last year, when the company posted a $631 million profit.
The decline, amounting to a 28% drop, was mainly caused by planned a 45-day Dubai Airport runway closure, flight and travel restrictions caused by COVID-19 pandemic.
Emirates Group is comprised of Emirates — the largest airline in the Middle East and operator of the largest fleet of Airbus A380 and Boeing 777 in the world — and Dubai National Air Transport Association (dnata), a company providing ground services at 78 airports.
“For the first 11 months of 2019-2020, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets,” Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Airline and Emirates Group, said in a statement. “However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions. ”
However, the company managed to deliver a financial year of profit due to sufficient demand, in particular in the second and third quarters of the fiscal year, and low fuel prices.
The group’s airport services provider company dnata recorded a sharp profit decline of 57% to $168 million during the 2019-2020 financial year. That decline was mainly caused by the collapse of Thomas Cook, COVID-19 and goodwill impairments.
The company, which provides aviation services across five continents, recorded the most profitable year in its history last year when it reported a $394 million profit.
During the year, Emirates carried 56.2 million passengers, 4% fewer than last year. In the previous year, the airline carried 58.6 million passengers The company’s total passenger and cargo capacity, however, fell even more, declining by 8% at the end of 2019-2020 financial year compared to the year prior.
Looking to 2021
According to the company’s chief executive, the COVID-19 pandemic will have a huge impact on the group’s performance in the following financial year.
“We expect it will take 18 months at least, before travel demand returns to a semblance of normality,” he said. “We continue to take aggressive cost management measures, and other necessary steps to safeguard our business, while planning for business resumption.”
The airline has reduced the basic salaries of most of its employees by 25% to 50% to avoid an imminent layoff. However, it is not clear whether the company will lay off some of its staff within the scope of what it has called “aggressive cost management measures” to assure the survival of the company in the upcoming months. The group has 105,730 employees of 160 different nationalities.
The airline’s fleet made up entirely of Airbus A380s and Boeing 777s. The airline has 115 Airbus A380 and 155 Boeing 777 in its fleet in addition to eight A380 and 126 Boeing 777X aircraft pending delivery.
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