Emirates posts $5.5bn loss as pandemic takes ‘tremendous toll’

Emirates posted an annual loss of $5.5bn in its last financial year as the “tremendous toll” of the coronavirus pandemic forced the airline to slash its workforce and turn to its Dubai government shareholder for support.

The carrier, which had made a $288m profit in the previous financial year, said annual revenue fell 66 per cent to $8.4bn to the end of March as capacity declined by 58 per cent.

The group was hit hard by travel restrictions, which included the United Arab Emirates’ suspension of passenger services for almost two months from March 2020.

The airline carried 6.6m passengers in 2020-21, down 88 per cent compared with the previous financial year.

Emirates gradually restored its passenger network from the middle of June last year to more than 120 destinations by the end of March.

Sheikh Ahmed bin Saeed Al Maktoum, Emirates’ chair and chief executive, said the carrier hoped to restore full operating capacity “as quickly as possible”.

He said the “fundamental ingredients” of Emirates’ success remain unchanged and the airline would work with the government to deliver a return of activity to an economy focused on trade and tourism.

“No one knows when the pandemic will be over but we know recovery will be patchy,” he said. “Economies and companies that entered pandemic times in a strong position will be better placed to bounce back.”

Emirates Group, which also includes aircraft ground services, posted a loss of $6bn, compared with a $456m profit for the previous financial year. The group’s cash position declined by about $1.6bn to $5.4bn over the year.

The airline received an injection of $3.1bn from its owner, the government, allowing it to sustain operations, but for the first time in its history redundancies were implemented across all aspects of its business to reduce costs in line with reduced capacity.

The number of staff at the group shrank by 31 per cent to about 75,000.

Cost cutting across the group, which also included restructuring financial obligations and renegotiating contracts, delivered savings of about $2.1bn. The group also invested $1.3bn in new aircraft, facilities and technology.

Emirates, which received three new Airbus A380 “superjumbos” during the year and phased out 14 older aircraft, said its order book of 200 remains unchanged “at this time”.

The airline’s cargo operations said revenues rose 53 per cent to $4.7bn on strong demand from shippers. It supplemented its fleet with 19 modified Boeing 777 passenger aircraft, with seats removed to carry more cargo.