Emirates Reports First Half 2020 Net Loss of AED 14.1 Billion on 74 Percent Revenue Decline
The Group reported a net loss of AED 14.1 billion (US$ 3.8) billion for H1 compared to a profit of AED 1.2 billion (US$ 320 million) during the same period last year. Revenue for the half declined 74 Percent to AED 13.7 billion (US$ 3.7 billion).
On Thursday (November 12, 2020), Emirates Group announced a fiscal first half (H1) 2020-21 net loss of AED 14.1 billion (US$ 3.7) billion compared to a net profit of AED 1.2 billion (US$ 320 million) during the same period last year. The Group’s H1 revenue declined year-over-year by 74 percent to AED 13.7 billion (US$ 3.7 billion) versus AED 53.3 billion (US$ 14.5 billion). Like all airlines, Emirates Group results were impacted by the global COVID-19 pandemic. As part of pandemic containment measures, Emirates and dnata’s Dubai hub suspended all scheduled passenger flights for eight weeks between April and May. Dnata is a Group subsidiary with businesses in airport operations and ground handling, travel, and flight catering. As of September 30, 2020, the Group’s liquidity was AED 20.7 billion (US$ 5.6 billion), down from AED 25.5 billion (US$ 7.0 billion) at March 31, 2020. In Thursday’s announcement, Emirates Airline and Group Chairman and Chief Executive, His Highness Sheikh Ahmed bin Saeed Al Maktoum, 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 shareholder injected US$ 2 billion into Emirates by way of an equity investment and they will support us on our recovery path.”
Since March 31, 2020, Emirates has reduced their employee base by 24 percent to 81,334 at the close of the first half. The Group is taking every possible measure to preserve their highly-skilled workforce, including job saver programs where available. Emirates Airline retired three older generation aircraft during the first six months of FY 2020-21. Regularly scheduled passenger flights were suspended on March 25th, but the carrier worked closely with governments and embassies to operate repatriation flights. Emirates gradually resumed scheduled passenger flights on May 21st and as of September 30th the carrier was operating passenger and cargo flights to 104 destinations.
Between April 1st and September 30, 2020, Emirates carried 1.5 million guests, a year-over-year decline of 95 percent. The company also carried 0.8 million tonnes of cargo, a decrease of 35 percent versus last year, but the yield more than doubled to 106 percent. During H1, Emirates SkyCargo also completed the partial retrofit of 10 Boeing 777-300ERs to carry freight on the main deck. Emirates’ operating costs during the first six months of the fiscal year declined 52 percent on an overall capacity reduction of 67 percent, attributable to lower fuel costs and substantially reduced flight operations. Despite reduced operations during H1, Emirates delivered a positive EBITDA of AED 290 million (US$ 79 million), versus AED 13.2 billion (US$ 3.6 billion) during the first half of FY 2019-2020.