Emirates Reports First Half-year Loss in 30 Years

 - November 12, 2020, 9:47 AM
From April 1 to September 30 Emirates managed to uplift 65 percent of the cargo volumes it carried during the same period last year despite a sharp reduction in belly capacity. (Photo: Emirates Airline)

A $3.8 billion half-year net loss reported by Dubai’s Emirates Airline on Thursday marked the first negative result the state-owned carrier acknowledged in more than 30 years. The airline attributed the loss directly to the Covid-19 crisis, during which time it ceased passenger operations for two months and carried just 1.5 million passengers from April 1 to September 30. Capacity measured in available seat kilometers shrunk by 91 percent while passenger traffic measured in revenue passenger kilometers fell 96 percent. Load factors averaged 38.6 percent, compared with 81.1 percent during the same period last year.

“We began our current financial year amid a global lockdown when air passenger traffic was at a literal standstill,” said Emirates chairman and CEO Sheikh Ahmed bin Saeed Al Maktoum in a statement. “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 percent of our position at the same time last year.”

Aircraft ground handling, cargo, and flight catering subsidiary Dnata lost $396 million, compared with a profit of $85 million during the same period a year earlier. Robust air freight traffic helped mitigate Dnata’s losses, said Emirates.

Emirates managed to uplift 65 percent of the cargo volumes it carried during the same period last year thanks to what the airline called its cargo division’s “outstanding agility in adapting its operations to provide air freight services in this new environment.” During the period, Emirates Skycargo completed the partial retrofit of 10 Boeing 777-300ER passenger aircraft to transport freight on the main deck and introduced new operation protocols to transport cargo in passenger cabins.

As of September 30, Emirates’s cash position stood at $5.6 billion, compared with $7 billion on the same date in 2019. Cost-containment measures included a 24 percent reduction of employee headcount to 81,334.

“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,” said Sheikh Ahmed. “In the first half of 2020-21, our shareholder injected $2 billion into Emirates by way of an equity investment and they will support us on our recovery path.”