The revenues of the Emirates Group decreased by 74% compared to the first six months of its current fiscal year 2021/2021, to reach 13.7 billion dirhams, compared to the same period, which amounted to 53.3 billion dirhams.
This significant decrease in revenue is mainly attributed to the “Covid-19” pandemic, which paralyzed air travel for many weeks after most countries of the world closed their borders and imposed travel restrictions. As part of the precautionary measures to contain the epidemic, regular passenger flights in Dubai were suspended for 8 weeks during the months of April and May.
The Emirates Group recorded losses of 14.1 billion dirhams, compared to profits of 1.2 billion dirhams in the same period. The cash balances of the group were 20.7 billion dirhams as of September 30, 2020, compared to 25.6 billion dirhams as of March 31, 2020.
Flexibility and automation
His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chief Executive Officer of Emirates Airlines and the Group, said: “We have started our current fiscal year with a global shutdown that has completely paralyzed air travel. As a result of these unprecedented conditions that afflicted the aviation and travel sector, the Emirates Group recorded half-year losses for the first time in more than 30 years. With travel halted, Emirates and dnata were able to quickly transform to serve merchandise demand and other opportunities. This helped us to restore our revenues from zero to 26% of what it was in the same period last year. ”
His Highness added: “The Emirates Group’s resilience in the face of the current challenging circumstances is testament to the strength of our business model and years of continuous investment in skills, technology and infrastructure that are now paying off in terms of cost and operational efficiency. Emirates and dnata have built strong brands and high-level digital capabilities that still serve our operations well, and have allowed us to master the rapid shifts in customer and online business activities over the past six months. ”
His Highness Sheikh Ahmed bin Saeed Al Maktoum thanked the customers for their continuous support, expressing his deep appreciation for the joint efforts made by the various parties, which allowed Dubai to resume air traffic and other economic activities quickly and safely. He said, “No one can predict the future, but we expect a strong return to travel demand as soon as the Covid-19 vaccine becomes available, and we are ready for that, because Emirates and dnata are fully prepared to put their resources into meeting demand and serving our customers.”
His Highness Sheikh Ahmed bin Saeed concluded by saying: “Thanks to our strong cash reserves and the support of our owners and the financial sector in general, we have been able to continue to ensure that we have sufficient financing to maintain and monitor our commercial operations in these difficult circumstances. In the first half of the current financial year, our owners have pumped $ 2 billion into investment in the Emirates Group, and they will continue to support us on the path of recovery. ”
The number of employees in the Emirates Group recorded a significant decrease compared to March 31, 2020, by 24%, to reach 81,334 employees on September 30, 2020. This is in line with the group’s capacity and business activities in the foreseeable future and the general expectations of the industry. Emirates Airlines and dnata continue to consider every possible way to maintain a skilled workforce, including participation in job protection programs where they exist.
During the first six months of the current fiscal year, Emirates Airlines took out 3 aircraft as part of its long-term strategy to continue modernizing the fleet, improve efficiency, reduce emissions and provide high-quality customer experiences.
And based on the directives of the General Authority of Civil Aviation in the United Arab Emirates, Emirates Airlines temporarily suspended passenger flights on March 25, and cooperated with many governments and embassies to operate evacuation flights for nationals of various countries, until Dubai International Airport was reopened to transit and then flights Regular passengers later. Emirates Airlines has also worked in full coordination with the health authorities in the country to implement comprehensive precautionary measures for health and safety on the ground and in the air to protect its customers, employees and the communities it serves.
Emirates Airlines has taken its commitment to customers to greater levels, by accelerating refunds, providing flexibility for rebooking, establishing a travel information center on its website to provide the latest developments on constantly changing travel requirements, and launching comprehensive medical coverage for COVID-19. »All passengers at no additional cost, for the first time in the industry.
Emirates Airlines gradually resumed its regular passenger services on May 21, and by September 30, the airline’s services were back to 104 cities with passenger and cargo flights.
During the first six months of the fiscal year, the total capacity, measured in the number of available tons multiplied by the number of kilometers traveled ATKM, decreased by 67% to reach 9.8 billion tons of kilometers available due to the significant decrease in the number of scheduled flights during the past months, including the suspension of flights Passengers at Dubai International Airport for 8 weeks. Passenger capacity, measured by the number of available seats times the number of kilometers traveled, was reduced by 91%. Passenger traffic, measured as RPKM, decreased by 96%, while the seat comfort rate fell to 38.6%, compared to 81.1% last year before the pandemic.
During the period from April 1 to September 30, 2020, Emirates Airlines carried 1.5 million passengers, a decrease of 95%, compared to the same period last year. The quantities of freight transported decreased by 35% to 0.8 million tons, and the proceeds more than doubled, and by 106%. This reflects the exceptional situation in the air freight market during the “Covid-19” pandemic, where a significant decrease in passenger flights led to limited capacity available, while demand for air freight rose strongly.
Emirates Airlines was able to load 65% of the cargo volumes it achieved in the same period last year, indicating the great flexibility of its cargo arm in adapting its operations to provide services in these emerging situations. Emirates SkyCargo quickly completed the modification of 10 Boeing 777-300ER passenger aircraft and introduced new operating protocols for safely loading cargo into the passenger cabin. These modified aircraft were soon put into service within the cargo network with vital safety protocols for employees.
In the first half of the fiscal year 2020/2021, Emirates Airlines lost 12.6 billion dirhams, compared to last year’s profit of 862 million dirhams. Emirates Airlines’ revenues, including other operating revenues, were recorded at 11.7 billion dirhams, a decrease of 75% compared to 47.3 billion dirhams during the same period last year. The decrease came as a result of strict restrictions on aviation and travel around the world due to the “Covid-19” pandemic.
Emirates operating costs decreased by 52%, with overall capacity reduced by 67%. Fuel costs have also decreased by 83% compared to the same period last year. This is due to the decrease in oil prices (by 49% compared to the same period last year), as well as to the decrease in the quantities of fuel used by 76% due to the significant decrease in aviation operations during the six months to the end of September. In recent years, fuel accounted for the largest percentage in the operational cost, but it accounted for only 11% of the operational cost in the first six months of the current fiscal year, compared with 32% in the same period of the previous year.
Despite the significant contraction of operations during the six months, the Emirates Group’s EBITDA benchmark remained positive at 290 million dirhams, compared to 13.2 billion dirhams (3.4 billion dollars) for the same period last year. (EBITDA is a corporate performance measure that is an indicator of operating profitability, that is, the profits the company generates from its assets and operations).
Dnata’s ground handling, catering and travel services have been severely affected by the “Covid-19” pandemic, as transacting airlines have reduced their flight schedules and service requirements or suspended their operations entirely, and restrictions at borders around the world have led to restrictions on demand and reservations.
Dnata has participated, wherever possible, in job protection and other government support programs. This included retraining employees and redeploying them to other essential industries with a shortage of workers in those industries during the pandemic. Dnata has also introduced new flexible business models in the market wherever possible, in order to retain more of its skilled workforce.
The strong air cargo traffic across the markets was a bright spot for dnata’s airport operations, which responded smoothly to meet customer demand. Dnata, across its commercial divisions, implemented enhanced health and safety measures to protect employees and communities, and conducted a review of its products and services to meet new customer requirements. It also seized opportunities in the markets when they appeared. It initiated a partnership with health care providers to conduct a “Covid-19” test for airline passengers before traveling, as part of its service to make travel procedures at home.
Dnata’s revenues, including income from other operations, amounted to AED 2.4 billion, a decrease of 68% compared to the revenues for the same period of the previous year, which was 7.4 billion dirhams.
Dnata losses totaled 1.5 billion dirhams, compared to last year’s profit of 311 million dirhams. This figure includes provisions for impairment of AED 689 million across dnata’s International Business divisions.
Dnata Airport Services maintained its position as the largest contributor to dnata’s revenue, with this contribution amounting to 1.7 billion dirhams, a 54% decrease in revenue for the first six months of the last fiscal year. The total number of aircraft that dnata provided handling services at all its operating sites recorded a sharp decrease by 71% to 102,917 aircraft. The cargoes that were handled recorded 1.3 million tons, a decrease of 12% from the same period last year.
The contribution of dnata Travel Services’ operations to revenues amounted to 95 million dirhams, compared to 1.8 billion dirhams, a significant decrease of 95% from the corresponding period last year. The travel division’s overall sales recorded a sharp decline for the first time, reaching 246 million dirhams, compared to 5.9 billion dirhams in the first six months of the last fiscal year.
Dnata’s aircraft catering operations contributed AED 436 million to total revenues, a decrease of 76%. The number of meals provided during the first six months reached 8.3 million meals, a decrease of 84% compared to the first half of the last fiscal year, in which the number of meals recorded 51.9 million.