The Emirates Group announces its results for the fiscal year 2020/2021

The Emirates Group announced its first annual loss in more than 30 years due to the decline in revenues caused by the impact of restrictions on flights and travel as a result of the “Covid-19” pandemic throughout the fiscal year 2020/2021.

The Emirates Group's 2020-21 Annual Report, which was launched today, showed losses of 22.1 billion dirhams (6.0 billion US dollars) for the fiscal year ending on March 31, 2021, compared to profits of 1.7 billion dirhams (456 million dollars) last year. .

Group revenues amounted to 35.6 billion dirhams ($ 9.7 billion), down 66% from the results of last year, and cash balances amounted to 19.8 billion dirhams ($ 5.4 billion), down 23% from last year, mainly due to weak demand caused by various travel restrictions and related business. Relevancy across all major business divisions and markets of the group due to the pandemic.

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 heavy toll on human lives, societies and economies, and the aviation and travel industry. Emirates and dnata have been hit hard in 2020/21 by lower demand. on international travel, as countries around the world closed their borders and imposed strict travel restrictions.

His Highness added, "Our main priorities throughout the year were to ensure the health, welfare and safety of our employees and customers, maintain our cash reserves and control costs, and restore our operations safely and sustainably. Emirates Airlines received an amount of 11.3 billion dirhams ($ 3.1 billion) from the Dubai government, and dnata benefited from Several industry support programs and exemptions of about 800 million dirhams in 2020/2021, which helped us to continue our operations and retain the vast majority of workers, but this unfortunately did not prevent the difficult decision to be made to adjust the size of the workforce to suit the low operating requirements.

For the first time since its inception, the Emirates Group has been forced to lay off workers. As a result, the group's total workforce decreased by 31% to 75,145 employees representing more than 160 different nationalities.

The Emirates Group restructured its financial obligations, negotiated contracts, audited and standardized operations, while maintaining strict cost control. Various cost-cutting initiatives contributed to achieving savings estimated at 7.7 billion dirhams during the year.

During the fiscal year 2020/2021, the Emirates Group invested 4.7 billion dirhams ($1.3 billion) in purchasing new aircraft and equipment, acquiring companies, facilities and the latest technologies to put business back on the path of recovery and future growth. It has also continued to invest resources in environmental initiatives, in addition to supporting communities and incubator programs that nurture talent and innovation to drive future industry growth.

His Highness Sheikh Ahmed bin Saeed Al Maktoum said: “No one knows when the world will overcome the pandemic, but we know that the recovery will be erratic. The economies and companies that maintained their strength at the time of the pandemic will be in a better position to recover. Emirates and dnata have enjoyed up to a year 2020/2021, with a proven track record of growth and profitability based on strong business models, continuous investments in capabilities and infrastructure, a strong drive for innovation and highly qualified human resources under the supervision of a stable leadership team.These key components of our success remain unchanged. Emirates Airlines and dnata are emerging stronger than before, in conjunction with Dubai’s constant ambitions to develop economic activity and build the city of the future.”

His Highness Sheikh Ahmed bin Saeed Al Maktoum concluded his remarks by saying: "This year, we will continue to adopt a flexible approach in response to changing market dynamics. We aim to restore our full operational capacity as soon as possible to serve our customers, and continue to contribute to the rebuilding of economies and societies affected by the pandemic."

Emirates performance

At the end of the 2019/2020 financial year, Emirates' total passenger and freight capacity decreased by 58% to 24.8 billion tons available ATKM, due to travel and flight restrictions due to the pandemic, including the complete suspension of passenger services in compliance with the directives of the UAE government. United States as of March 25, 2020.

During the fiscal year 2021/2021, Emirates Airlines received 3 new A380 aircraft, and 14 aircraft were out of service, including 9 Boeing 777-300ER and 5 A380 aircraft, bringing the number of the fleet at the end of March 2021 to 259 aircraft. The average age of the fleet's aircraft was 7.3 years.

Emirates' order book remained unchanged at 200 aircraft. It remains committed to its long-term strategy to operate a modern and efficient fleet, underscoring its "Fly Better" brand promise because modern aircraft are better for the environment and for operations, as well as better for customers.

Emirates Airlines, through its close cooperation with various parties in the aviation industry, continues to gradually restore the passenger network as of mid-June 2020, when the United Arab Emirates opened its airports to transit passengers, and then began receiving international visitors.

During the fiscal year, Emirates Airlines reactivated its codeshare partnership with flydubai, and concluded agreements with Portuguese "Tap Air", "Fly Sever" and "Air Link" in South Africa to expand its network and provide additional options for its customers.

Emirates has demonstrated its ability to adapt and respond to challenges, as well as the resilience of its employees and business model. It went from a complete cessation of passenger operations at the start of the fiscal year, to operating operations in more than 120 destinations by March 31, 2021.

As a result of the significant decline in the use of available energy and restrictions in most markets, Emirates' total revenue for the fiscal year decreased by 66% to 30.9 billion dirhams ($ 8.4 billion). Currency fluctuations this year did not have a significant impact on revenue.

Operating costs decreased by 46% compared to fiscal year 2019/2020. Cost of ownership (usage and depreciation) and staff cost were the two largest cost components in the fiscal year, followed by fuel, which accounted for 14% of operating costs compared to 31% in 2019-2020. The fuel bill decreased by 76% compared to the previous year, to reach 6.4 billion dirhams (1.7 billion dollars) as a result of a 69% decrease in fuel purchases due to the impact of reduced capacity.

As a result of the ongoing restrictions on flights and travel due to the pandemic, Emirates announced losses of 20.3 billion dirhams ($ 5.5 billion) compared to profits for the previous year, which amounted to 1.1 billion dirhams ($ 288 million), and a negative profit margin of 65.6%. This includes a one-time impairment charge of 710 million dirhams ($193 million) mainly related to aircraft that are currently grounded and not expected to return to service before their scheduled retirement during the new financial year.

Emirates carried 6.6 million passengers, down 88%, in the 2020/21 financial year, with seat capacity declining by 83%. Seat occupancy was 44.3%, compared to 78.5 in the previous fiscal year. The rate of return on passenger kilometer (RPKM) increased by 48% to 38.9 fils (10.6 US cents). This rise is mainly due to the attractiveness of operating lines and prices, and the continued good demand for first and business classes. Given the pandemic conditions, seat occupancy and revenue cannot be compared to the previous year's performance.

Emirates Airlines has led the global industry in developing new services and operating protocols to protect its customers and employees, and during the pandemic, it launched several customer initiatives such as: providing the first free medical coverage against “Covid-19” for all passengers, waiving fees so that customers can re-book, and speeding up the response Funds for customers, the activation of the “biometric path” and other technology projects that have enhanced the travel experience while reducing contact and contact at service points.

Emirates has invested in upgrading its A380 experience with new Premium Economy Class seats and other product improvements. It also launched two new technology platforms, the Emirates Partners Portal and the Emirates Gateway, to improve the engagement and service of its trading partners.

Emirates Skywards, the rewarding frequent flyer program, has generously extended tier status and miles validity to its members until 2022, and launched various initiatives to help them earn miles and redeem them for rewards even if they cannot fly immediately.

Emirates SkyCargo has achieved an excellent performance by responding quickly to demand in the changing global markets, contributing 60% of the total transportation revenue.

The carrier rapidly expanded its operations, rebuilding the freight network to meet strong demand from shippers, who faced a capacity crunch when the pandemic forced airline carriers to drastically reduce their flights. Available cargo capacity was enhanced with the introduction of 19 "small cargo planes" (Boeing 777-300ER passenger aircraft modified by removal of Economy Class seats to carry cargo in the passenger cabin). The cargo division has also introduced new protocols for the safe loading of goods in overhead lockers and on passenger seats.

In addition to supporting global supply chains of foodstuffs, medical supplies and other goods and commodities, Emirates Air Cargo has also benefited from its capabilities and infrastructure in transporting and distributing medicines and “Covid-19” vaccines across the world, as well as in transporting humanitarian relief materials to Lebanon after the Beirut port explosion.

In October, Emirates Air Cargo established an air center approved under the GDP Safe Distribution Practices standards for the distribution of “Covid-19” vaccines, and then entered into a partnership with UNICEF to facilitate the rapid transportation of vaccines to developing countries via Dubai.

Thanks to the strong demand for air freight throughout the year, the Emirates Cargo division generated revenues of 17.1 billion dirhams ($ 4.7 billion), a growth of 53% compared to the previous year.

The freight yield per ton kilometer (FTKM) has risen strongly by 88%, due to the unusual conditions imposed by the pandemic, which have caused a significant decrease in the available energy worldwide.

Total freight volumes carried decreased by 22% to 1.9 million tons as a result of the capacity contraction throughout the year. At the end of the financial year 2020/2021, Emirates SkyCargo was operating a fleet of 11 Boeing 777F aircraft.

During the fiscal year, UAE hotels recorded revenues of 296 million dirhams (81 million dollars), a decrease of 49% compared to the previous year as a result of the suspension of events and the temporary closure of various facilities due to the pandemic.

During the year, Emirates Airlines succeeded in restructuring aircraft leases and loans. The support of aircraft lessors and financers during these difficult circumstances embodies the confidence of the financial community in the Emirates business model and its prospects in the medium and long term.

In addition to the financing of 14.5 billion dirhams that Emirates raised during the financial year for aircraft and general purposes, the airline received confirmed offers to finance two aircraft in the current fiscal year 2021/2022, and continues to benefit from the financial market to obtain more liquidity to provide more support in the face of The potential effects of the pandemic on the company’s cash flows in the foreseeable future.

Emirates Airlines concluded its fiscal year with cash balances of 15.1 billion dirhams ($ 4.1 billion), which is a strong position in light of returning 8.5 billion dirhams in refunds to customers.

dnata performance

“Covid-19” has had a clear impact on the business of all dnata companies, as it recorded in the fiscal year 2020/2021 a loss of 1.8 billion dirhams ($496 million) for the first time. This includes provisions for impairment of AED 766 million ($209 million) on intangible assets across all divisions.

With the significant decline in aviation and travel activity around the world, dnata's total revenue fell 62% to 5.5 billion dirhams ($ 1.5 billion).

dnata continued to lay the foundations for future growth with investments in the fiscal year of 328 million dirhams ($89 million). dnata has completed the acquisition of Destination Asia, becoming one of the largest destination management companies in Southeast Asia under the dnata Travel Group umbrella. dnata has also moved ahead with major investments to enhance the business, including opening a new state-of-the-art freight facility in Manchester, upgrading technology across leisure and business travel businesses, establishing a dedicated in-flight retail franchise center in the UK to serve global customers, and opening a second facility. Catering in Dublin.

dnata's operating cost decreased during the fiscal year by 48% to 7.4 billion dirhams (US$ 2.0 billion), as a result of reduced operations in the airports operations, catering and travel divisions worldwide.

dnata's cash balances amounted to 4.7 billion dirhams ($1.3 billion), down 12%. Payments in financing activities, primarily loan and lease payments, amounted to 548 million dirhams ($149 million), while dnata used 149 million dirhams ($41 million) in core investment activities. The business saw positive operating cash flows of AED 10 million (US$ 3 million) in 2020/2021 despite the sharp decline in revenue and the unprecedented amount in the travel division returned to customers.

dnata's revenue from airport operations (UAE) decreased to 1.7 billion dirhams (455 million dollars).

The number of aircraft to which dnata provided handling services in the United Arab Emirates decreased by 59% to 78,000 aircraft, as a result of the suspension of regular passenger flights at Dubai (Dubai International and Al Maktoum) airports in March 2020, as part of measures to contain the pandemic in the UAE. United. Total handled cargo by dnata decreased by 18% to 575,000 tons, reflecting the reduced capacity on flights available in the air freight market throughout the year.

Revenues from dnata's International Airport Operations division decreased by 43% to AED 2.3 billion ($617 million), reflecting the effects of the pandemic across global markets. Global airport operations continue to be dnata's largest business segment in terms of revenue contribution.

The number of aircraft handled decreased by 57% to 211,000 aircraft, as a result of the decrease in the volume of business due to the pandemic, while the quantities of cargo handled witnessed a slight decrease by 5% to 2.1 million tons.

During the financial year 2020/2021, dnata continued to enhance its international airport operations by expanding its passenger and cargo handling operations. In Singapore and Australia, it has started using high-tech refrigerated containers to enhance its ability to handle medicines and perishable items.

In Italy, its subsidiary, Airport Handling SpA, has partnered with Beta Trans to provide full freight services to customers at Milan Malpensa Airport.

In Indonesia, dnata entered the market through a partnership with PT UNEX Rajawali Indonesia (UNEX) in which both will jointly make investments in ground handling facilities, equipment and training.

dnata also continued to win new contracts in 2020/2021. In Australia, dnata began providing Qantas ground handling at most of the country's major airports, and GTA dnata, the Canadian joint venture, was awarded a five-year ground handling license at the Vancouver International Airport.

In 2020/2021, dnata performed the first green handling of a customer aircraft in the US at New York JFK Airport, a feat made possible by its investment in zero-emissions electrical ground support equipment. Marhaba, the dnata airport services brand, also opened an expanded and renovated lounge at Dubai International Airport, and expanded its international network with the inauguration of a new lounge at Ninoy Aquino International Airport in Manila.

dnata Inflight Catering contributed AED 1.0 billion ($285 million) to dnata's revenue, down 68%. The company loaded about 16.9 million meals to airline customers, a significant decrease of 82%, mainly due to the impact of a full year of the pandemic, including the complete closure of the facilities owned by dnata in Australia two years ago.

Throughout the year, the catering division has adapted its products and services to meet the requirements of new customers, including providing meals for quarantine facilities. He has also worked with local organizations in Australia, Ireland, Italy and the United Kingdom to support communities in need.

Dnata Catering continued to make major investments for its future growth, opening a second state-of-the-art facility in Dublin, launching new vital operations to reduce food waste across its operations and using solar panels at its Singapore facility as part of its commitment to reducing the environmental footprint of its operations.

dnata's travel revenue decreased by 96% to AED 130 million ($35 million). The value of TTV's total core deals for travel services sold decreased by 98% to 229 million dirhams ($62 million). Excluding cancellations of reservations caused by the impact of "Covid-19", revenue from the travel division decreased by 89% to AED 294 million, and the value of TTV core total deals decreased by 83% to AED 1.7 million.

dnata's travel division has seen a significant reduction in travel demand across all markets. During an extremely difficult year in a rapidly changing global environment, the division focused on initiatives to support customers and create value. dnata has helped its customers rebuild trust through refunds, rebooks and up-to-date travel information.

The dnata Travel Group continued to secure growth opportunities. Throughout the year, it provided online booking for London City Airport in the UK, and expanded its business in Oman through its partnership with OUA Travel allowing travel agents in the Sultanate to promote and sell a wide range of Gold Medal travel products.

dnata's travel business in the United Arab Emirates and the Gulf Cooperation Council (GCC) remains stable. dnata has capitalized on the positioning of its headquarters and Dubai's openness to international travel to promote Dubai and the United Arab Emirates globally, as well as its tour operator subsidiary, Arabian Adventures.

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