Dubai-based Emirates Group has posted its first non-profitable year in over three decades, recording an annual loss of Dhs22.1bn ($6bn) for the financial year ending March 31, 2021, compared with a Dhs1.7bn ($456m) profit reported last year. The group’s revenue totalled Dhs35.6bn ($9.7bn), marking a decline of 66 per cent over last year. Meanwhile, the group’s cash balance equalled Dhs19.8bn ($5.4bn), down 23 per cent from last year mainly due to weak demand caused by the pandemic related business and travel restrictions across all of the group’s core business divisions and markets. The Covid-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry. In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.
Emirates received a capital injection of Dhs11.3bn ($3.1bn) from our ultimate shareholder, the government of Dubai, and dnata tapped on various industry support programmes and availed a total relief of nearly Dhs800m in 2020-21. Redundancies were implemented across all parts of the business, resulting in a total workforce reduction by 31 per cent to 75,145 employees, representing over 160 different nationalities. Furthermore, financial obligations were restructured, contracts renegotiated, processes examined and operations consolidated, with cost reduction initiatives returning an estimated saving of Dhs7.7bn during the year, the statement added. In 2020-21, the group collectively invested Dhs4.7bn ($1.3bn) in new aircraft and facilities, acquisition of companies and technologies. The airline reported a loss of Dhs20.3bn ($5.5bn) after last year’s Dhs1.1bn ($288m) profit, and a negative profit margin of 65.6 per cent. This includes a one-time impairment charge of Dhs710m ($193m) mainly relating to certain aircraft which are currently grounded and not expected to return to service before their scheduled retirement within the next financial year.