Emirates airline reported an annual profit of AED1.1 billion ($288 million), up 21% from the previous year, in its results announced on May 10, 2020.
The sharp increase in profit was due to "healthy demand", particularly in the second and third quarters of the year and "lower average fuel prices over the year" according to Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group
The airline said its revenue declined by 6% to AED92bn ($25.1bn), impacted by Dubai International’s airport’s planned runway closure for 45 days last year, and the temporary suspension of passenger flights in March due to Covid-19. ower fuel cost compared to previous year.
Emirates Group, which includes airport services firm Dnata, reported a profit of AED1.7 billion ($456m). Emirates Group said it ended the year with a cash balance of AED25.6 billion ($7bn).
Dnata reported a profit of AED 618m ($168m), which includes a AED216m ($59m) one-time gain from sale of a stake in an IT company, Accelya.Emirates said the group has not declared a dividend for this financial year - after last year’s dividend of AED500m ($136m) to the Investment Corporation of Dubai – “due to the unprecedented business environment from the ongoing pandemic, and to protect the group’s liquidity position”.
“For the first 11 months of 2019-20, Emirates and Dnata were performing strongly, and we were on track to deliver against our business targets,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group.
“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.”
US dollar impact
The pandemic aside, Sheikh Ahmed said the further strengthening of the US dollar against major currencies “eroded our profits to the tune of AED1 billion ($272m), global airfreight demand remained soft for most of the year, and competition intensified in our key markets”.
“Every year we are tested on our agility and ability,” Sheikh Ahmed said.
“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.”
Emirates introduced a temporary reduction of basic salary for the majority of employees for three months in March, but said there would be no job losses. The airline said across its more than 120 subsidiaries, the group’s total workforce remained nearly unchanged with 105,730 employees, representing over 160 different nationalities.
“This will remain our top priority as we navigate a gradual return to operations in the coming months,” he added.
Looking to the year ahead, Sheikh Ahmed said the Covid-19 pandemic “will have a huge impact on our 2020-21 performance”.
“We expect it will take 18 months at least, before travel demand returns to a semblance of normality,” he said.
“In the meantime, we are actively engaging with regulators and relevant stakeholders, as they work to define standards to ensure the health and safety of travellers and operators in a post-pandemic world. Emirates and Dnata stand to reactivate our operations to serve our customers, as soon as circumstances allow.”