Dubai state carrier Emirates Airline reported a 21% increase in its full-year profit in the 12 months to March 31, it reported Sunday. The airline, one of the biggest long-haul carriers in the world, said it made 1.06 billion dirhams ($287.5 million) in that time, up from 871 million dirhams the previous year. But the coming year will be severely impacted by the coronavirus pandemic, the airline’s chairman said.
Emirates Airline and Group Chairman Sheikh Ahmed bin Saeed Al Maktoum said that from February, things began changing rapidly as the coronavirus spread around the globe, halting international travel.
“For the first 11 months of 2019-20, Emirates and dnata were performing strongly, and we were on track to deliver against our business targets. However, from mid-February things changed rapidly as the COVID-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.”
The pandemic cost Emirates over 3.4 billion dirhams in revenues in March, the airline said. Al Maktoum does not see air travel returning to normal for at least another 18 months, and warned that the Covid-19 will have a major effect on the coming year’s performance.
“The COVID-19 pandemic will have a huge impact on our 2020-21 performance, with Emirates’ passenger operations temporarily suspended since 25 March, and dnata’s businesses similarly affected by the drying up of flight traffic and travel demand all around the world,” the chairman said in a statement. “We continue to take aggressive cost management measures, and other necessary steps to safeguard our business, while planning for business resumption. We expect it will take 18 months at least, before travel demand returns to a semblance of normality.”
The airline has cut executive pay and reduced the basic salaries of most of its staff, it reported in late March when it halted all flights at the requirement of the UAE government.
Emirates ended the 2019-20 year with a “healthy level” of 20.2 billion dirhams ($5.5 billion) in cash assets, the company said. The flagship airline carried 56.2 million passengers in the year ending March 31.
Emirates Group, which also owns air transport services company dnata, reported full year revenue and other operating income at 104 billion dirhams versus 109.3 billion dirhams a year ago, with a profit of 1.7 dirhams, its 32nd consecutive year of profit. Emirates Group finished the year with a “solid cash balance” of 25.6 billion dirhams.
Emirates’ total passenger and cargo capacity declined by 8% to 58.6 billion available ton kilometers at the end of 2019-20, “due to the DXB runway closure capacity restrictions and COVID-19 impact with a complete suspension of passenger services as directed by the UAE government during March 2020,” an Emirates press release issued Sunday read.
Emirates airline is the world’s largest operator of wide-body jets and last year held the spot as the fourth-largest in terms of passenger and freight ton miles flown. Dubai Airport in 2019 was ranked as the world’s largest hub in terms of passenger traffic.