Emirates suffers first half year loss for 30 years

Emirates slumped to its first half year loss in 30 years as it battled the impacts of the Covid pandemic.

The Dubai-based group lost US$3.8 billion in the six months to September, compared to a US$235 million profit in the corresponding period last year.

Its ground handling operation, Dnata, lost US$396m, with the airline suffering a deficit of US$3.4b.

Emirates revealed its workforce has been slashed by a quarter since March as operations ground to a halt.

Chairman and Chief Executive Sheikh Ahmed bin Saeed Al Maktoum said: "We began our current financial year amid a global lockdown when air passenger traffic was at a literal standstill.

"In this unprecedented situation for the aviation and travel industry, the Emirates Group recorded a half-year loss for the first time in over 30 years."

Despite the grim result, he predicted travel would swiftly return once a vaccine is found.

"No one can predict the future, but we expect a steep recovery in travel demand once a Covid-19 vaccine is available, and we are readying ourselves to serve that rebound," he said. "In the meantime, Emirates and dnata remain responsive in deploying resources to serve our customers and meet demand.

"We have been able to tap on our own strong cash reserves, and through our shareholder and the broader financial community, we continue to ensure we have access to sufficient funding to sustain the business and see us through this challenging period."

Shareholders injected US$2 billion into Emirates in the first half of the year "and they will support us on our recovery path", Al Maktoum added.

The airline said its cargo business helped deliver some revenue.

While cargo volume fell 35%, yield soared 106% as companies were forced to pay top dollar for the limited available capacity.

Ground handling division dnata was also able to "pivot", Emirates said.

"As passenger traffic disappeared, Emirates and dnata have been able to rapidly pivot to serve cargo demand and other pockets of opportunity. This has helped us recover our revenues from zero to 26% of our position same time last year," Al Maktoum said.

"The Emirates Group’s resilience in the face of current headwinds is testimony to the strength of our business model, and our years of continued investment in skills, technology and infrastructure which are now paying off in terms of cost and operational efficiency.

"Emirates and dnata have also built strong brands and agile digital capabilities which continue to serve us well, and enabled us to respond adeptly to the accelerated shift of customer and business activities online over the past 6 months."

Overall group revenue in the period fell 74% to US$ 3.7 billion with passenger numbers falling 95% to 1.5 million,.

Load factors fell from pre-pandemic levels of 81.1% to 38.6%.