The Emirates Group announced its financial results for the financial year ending March 31, 2021. This is the first time in over three decades for the airline to have an annual loss.
The group lost AED 22.1 billion ($6 billion) due to 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.
This is down from a profit of AED 1.7 billion ($456 million) from the previous financial year. The Group’s revenue was AED 35.6 billion ($9.7 billion), a decline of 66% over last year’s results.
“The COVID-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry,” said Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive Emirates Airline and Group. “In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.”
The Group’s cash balance was AED 19.8 billion ($5.4 billion), down 23% from last year. This is also fully attributable to weak demand caused by the pandemic-related travel restrictions across all of the Group’s core markets.
Sheikh Ahmed said, “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 ($3.1 billion) from the Government of Dubai – its ultimate shareholder, and dnata also tapped on various industry support programs availing a total relief of nearly AED 800 million in 2020-21, he informed.
“These helped us sustain operations and retain the vast majority of our talent pool. Unfortunately, we still had to make the difficult decision to resize our workforce in line with reduced operational requirements,” he said.
This is also the first time for the Group when employees were laid off, as a result of which the total workforce of Emirates group reduced by 31 percent to 75,145 employees, representing over 160 different nationalities.
Keeping a tight control on costs across the Group, financial obligations were restructured, contracts renegotiated, processes examined, and operations consolidated. The various cost reduction initiatives returned an estimated saving of AED 7.7 billion during the year, the airline said in a statement.
In 2020-21, the Group collectively invested AED 4.7 billion (US$ 1.3 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 programs 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.”
He added that 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 said.
Sheikh Ahmed said, “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.”