Emirates Reports 32nd Year of Profit, Earns $456 Million on $28.3 Billion in Revenues
Emirates reported on Sunday their 32nd consecutive year of profit for the 2019-2020 financial year ending March 31, 2020. The carrier earned a profit of $456 million on revenues of $28.3 billion. Emirates ended the FY with a cash balance of $7 billion.
Yesterday (May 10, 2020), Emirates Group announced their 32nd annual year of profits, earning $456 million on a 5 percent decline in revenues to $28.3 billion. The company ended the financial year with a cash balance of $7.0 billion, up 15 percent year-over-year due to a strong business performance through February 2020 and lower fuel prices. For FY 2020, Emirates (the airline) reported a 21 percent increase in profit of $288 million on a 6 percent revenue decline to $25.1 billion. Revenues were impacted by a planned 45 day runway closure at DXB as well as passenger flight suspensions in March due to the global COVID-19 pandemic. The Group’s ‘dnata’ unit reported a profit of $168 million, including a one-time gain of $59 million from the sale of their stake in IT company Accelya. In Sunday’s announcement, His Highness Sheikh Ahmed bin Saaed Al Maktoum, said,
“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. However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions. Even without a pandemic, our industry has always been vulnerable to a number of external factors. In 2019-2020, the further strengthening of the US dollar against major currencies eroded our profits to the tune of AED 1.0 billion, global airfreight demand remained soft for most of the year, and competition intensified in our key markets. Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year. Every year we are tested on our agility and ability. While tackling the immediate challenges and taking advantage of opportunities that come our way, our decisions have always been guided by our long-term goal to build a profitable, sustainable, and responsible business based in Dubai.”
In order to protect the Group’s strong liquidity position, the company has not declared a dividend for 2019-2020. Last year the Group paid a dividend of $136 million to the Investment Corporation of Dubai. During 2019-2020 the Group invested $3.2 billion in new aircraft, equipment, acquisitions, facilities modernization, technologies and employee initiatives, down from $3.9 billion the previous year. At the 2019 Dubai Air Show last November, the company placed a $16 billion order for 50 Airbus A350 XWBs and an $8.8 billion order for 30 Boeing 787 Dreamliners. Key investments by dnata for the financial year included expansion of North American catering capabilities including the opening of new facilities in Vancouver, Houston, Boston, Los Angeles and San Francisco. Dnata also completed the purchase of the remaining stake in Alpha LSG, becoming the sole shareholder of the UK’s largest inflight catering, onboard retail and logistics company.
Emirates received six new Airbus A380s during the financial year and phased out four Boeing 777 300ERs, the company’s last 777-300 and one Boeing 777 Freighter. As of March 31, 2020, the company had a young fleet of 270 aircraft with an average age of 6.8 years. The carrier launched three new routes during the 2019-2020 financial year including service to Porto (Portugal), Mexico City (Mexico) and Bangkok-Phnom Penh (Thailand). Additionally, Emirates signed a codeshare agreement with India’s Spicejet and interline agreements with Spain’s Vueling (an IAG carrier), and Turkish LCC Pegasus Airlines. The company also celebrated a successful two-year strategic partnership with flydubai. Since the partnership was established in October 2017, over 5.3 million guests have benefited from seamless connectivity on the Emirates and flydubai networks.