Emirates celebrates the arrival of its inaugural flight from Dubai International Airport (DXB) to Fort Lauderdale-Hollywood International Airport (FLL), marking the launch of their eleventh U.S. gateway on Thursday, Dec. 15, 2016, in Fort Lauderdale, Fla. (Jesus Aranguren/AP Images for Emirates Airline)

MIAMI – Emirates Group has recorded profits of US$456m in its 2019-2020 annual report, resulting in a 28% jump from last year.

Specifically, Emirates (EK) reported a US$288m profit, a 21% increase from last year’s reported profits, despite its revenue declining by 6% to US$25.1b due to the 45-day closure of DXB runway in Q1 and the temporary suspension of passenger flights due to travel restrictions.

Even though the group revenue totaled US$28.3b, a decline of 5% from last year, its cash balance registered a 15% increase of about US$7b in comparison with 2019, as the conglomerate took decisions regarding lower fuel costs and strong business performance since February 2020.

2019-2020 report: item by item

His Highness Sheikh Ahmed bin Saeed Al Maktoum, CEO of the Group said that even without a pandemic, the industry had always been vulnerable to a multitude of external factors. As an example, the company also saw its capacity diminished to 59bn ATKM (Available Tonne Kilometres).

Trying to maintain its liquidity position, the Dubai-based conglomerate did not declare its dividends to the Investment Corporation of Dubai, a figure which was about US$136m in 2019.

Despite the worsening of the aviation industry, the group said that its total workforce is 105,730 strong, divided over its more than 120 subsidiaries and that despite the crisis, its aircraft fleet size remains unchanged, as it already ordered 50 A350 XWB and 30 Boeing 787 Dreamliners in 2019.

Further, the 2019-2020 report shows that the group collectively invested US$3.2b in new aircraft and equipment, acquisition of companies and modern facilities with new technologies and employee initiatives, decisions that influenced last year’s US$ 3.9b investment expenditure record.

Even though the company will also invest resources on community support, environmental initiatives, and aviation innovation programs that would help with the industry’s recovery, Al Maktoum warned of an adverse situation on the Group’s 2020-2021 performance.

“We expect it will take 18 months at least, before travel demand returns to a semblance of normality. In the meantime, we are actively engaging with regulators and relevant stakeholders, as they work to define standards to ensure the health and safety of travellers and operators in post-pandemic.”

Until the planned resumption, the Group announced that it would take aggressive cost management measures and other necessary steps to safeguard the business alongside DNATA (Dubai National Air Transport Association).

Emirates’ 2019-2020 report performance

During the 2019-2020 financial year, which ended on March 31, EK strengthened three new passenger routes (Portugal, Mexico and Thailand) while it expanded its golbal network with flydubai (FZ), Vueling (VY), Interjet Airlines (4O) and Pegasus Airlines (PC) partnerships.

Regarding its fleet operations, the carrier received six new A380 aircraft, withdrew four Boeing 777-300ER, one Boeing 777 freighter, and its last 777-300 for a total fleet of 270 airplanes with an average age of 6.8 at the end of March.

However, the company reached red numbers in other financial aspects related to passenger and cargo capacity, which had an 8% decline to 58.6 billion ATKM. In addition, EK’s passenger traffic went down 4% as it carried 56.2m travelers, dropping its seat capacity to 6%.

Nevertheless, the 2019-2020 airline’s Passenger Seat Factor of 78.5% further showed positive feedback on its capacity management and positive travel demand for the company, as the item was set at 76.8% last year.

The most significant aspect here relies on fuel price variability during the period. While EK’s operating costs declined by 10% due to a 9% decrease in jet fuel price, its fuel bill also decreased by 15% over 2019 to US$7.2b, 31% of operating costs, or 1% less when compared to its 2018-2019 report.

At the end of March, the carrier had US$5.5b of cash assets that play a part in the survival decisions that the Group would take to face the 18 upcoming months of irregular air passenger demand. In the last quarter, EK carried only repatriation flights in accordance with Dubai’s flying restrictions.