Emirates Group announces first loss-making year ‘in over 30 years’ as pandemic continues to bite

The Emirates Group announced its first year of loss in over 30 years caused by a significant drop in revenue, fully attributed to the impact of COVID-19 related flight and travel restrictions throughout its entire financial year 2020-21.

Released in its 2020-21 Annual Report, the Emirates Group posted a loss of AED 22.1 billion (€4.96 billion) for the financial year ended 31st March 2021, compared with an AED 1.7 billion (€381.7 million) profit for last year. The Group’s revenue was AED 35.6 billion (€7.99 billion), a decline of 66 per cent over last year’s results.

The Group’s cash balance was AED 19.8 billion (€4.45 billion), down 23 per cent from last year mainly due to weak demand caused by the various pandemic related business and travel restrictions across all of the Group’s core business divisions and markets.

His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “The COVID-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry.

“In 2020-21, Emirates and dnata [Dubai National Air Travel Agency, an Emirati airport services provider] were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.

“Our top priorities throughout the year were: the health and wellbeing of our people and customers, preserving cash and controlling costs, and restoring our operations safely and sustainably.

“Emirates received a capital injection of AED 11.3 billion (€2.54 billion) from our ultimate shareholder, the Government of Dubai, and dnata tapped on various industry support programmes and availed a total relief of nearly AED 800 million (€179.67 million) in 2020-21.

“These helped us sustain operations and retain the vast majority of our talent pool. Unfortunately, we still had to make the difficult decision to resize our workforce in line with reduced operational requirements.”

For the first time in the Group’s history, redundancies were implemented across all parts of the business. As a result, the Group’s total workforce reduced by 31 per cent to 75,145 employees, representing over 160 different nationalities.

Keeping a tight control on costs, across the Group, financial obligations were restructured, contracts renegotiated, processes examined and operations consolidated. The various cost reduction initiatives returned an estimated saving of AED 7.7 billion (€1.73 billion) during the year.

In 2020-21, the Group collectively invested AED 4.7 billion (€1.06 billion) in new aircraft and facilities, the acquisition of companies, and the latest technologies to position the business for recovery and future growth. It also continued to invest resources towards environmental initiatives, as well as supporting communities and incubator programmes that nurture talent and innovation to drive future industry growth.

Sheikh Ahmed said: “No one knows when the pandemic will be over, but we know recovery will be patchy. Economies and companies that entered pandemic times in a strong position, will be better placed to bounce back. Until 2020-21, Emirates and dnata have had a track record of growth and profitability, based on solid business models, steady investments in capability and infrastructure, a strong drive for innovation, and a deep talent pool led by a stable leadership team. These fundamental ingredients of our success remain unchanged. Together with Dubai’s undiminished ambitions to grow economic activity and build a city for the future, I am confident that Emirates and dnata will recover and be stronger than before.”

He concluded: “In the year ahead, we will continue to adopt an agile approach in responding to the dynamic marketplace. We aim to recover to our full operating capacity as quickly as possible to serve our customers, and to continue contributing to the rebuilding of economies and communities impacted by the pandemic.”

Emirates carried 6.6 million passengers (down 88 per cent) in 2020-21, with seat capacity down by 83 per cent. The airline reports a Passenger Seat Factor of 44.3 per cent, compared with last year’s passenger seat factor of 78.5 per cent.

The full 2020-21 Annual Report of the Emirates Group – comprising Emirates, dnata and their subsidiaries – is available here.