Emirates airline reports $5.5 billion loss as COVID-19 disrupts global travel

The Middle East’s largest airline, Emirates, on June 15 announced a net loss of US$5.5 billion over the past year as revenue fell due to global travel restrictions sparked by coronavirus pandemic. According to a press note, Emirates said that revenue had declined by $8.4 billion, even as operating costs decreased by 46 per cent. It added that its total passenger and cargo capacity declined by 58 per cent over the past year and the airline was only able to squeeze out profits of $288 million in 2020. 

First non-profitable year in three decades

This marks the first time in more than three decades that the airline’s parent group did not churn out a profit. As per the press note, Emirates carried just 6.6 million passengers last year, which is a staggering decline of nearly 90 per cent from the previous year. Even after the state-owned airline was thrown a $2 billion lifeline from Dubai’s government to stave off a liquidity crunch, Emirates Group, which also operates dnata travel and ground services at airports, reported a total loss of $6 billion. 

“The Emirates Group today announced its first year of loss in over 30 years caused by 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,” the airline said in a statement. 

According to AP, the airline was forced to ground all passenger flights for nearly eight weeks starting in March 2020 amid a temporary closure of airports in the United Arab Emirates, including transit flights through Dubai. The airline, which is known worldwide for its luxury first-class cabins, quality service and modern aircraft, received three new Airbus 380 aircraft over the past year and phased out 14 older aircraft. It now operates a fleet of 259 planes, including cargo.

The company said that despite the financial loss, it remains committed to its order booking for 200 new aircraft as part of its “long-standing strategy of operating a modern and efficient fleet”. Meanwhile, a brief statement issued by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum at the start of the company’s annual report noted how the pandemic “has been one of the biggest challenges humanity has faced”. He noted his own country’s handling of the pandemic, which has varied widely from one emirate to the next and depended heavily on the decisions of its local rulers.

“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,” he said. 

(Image: AP/Unsplash)