Emirates Group will emerge strong from crisis: Sheikh Mohammed

Inayat-ur-Rahman, Business Reporter

His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, said on the eve of Emirates Group’s annual results released on Sunday that the Emirates Group and its subsidiaries will emerge strong from the crisis that the aviation industry is going through following the outbreak of the coronavirus.

“I am confident that Emirates and dnata will emerge from this difficult period, strong and ready to reclaim their position as global leaders shaping the future of the aviation, travel and tourism industries, and to continue contributing outstanding services to the people and to the world,” Sheikh Mohammed said.

“In the UAE, we have always regarded ourselves as part of a global community. We’re a nation that welcomes the world to visit, live, work, study, or collaborate on projects that contribute to human progress. We firmly believe that when like-minded nations and institutions come together, we can achieve extraordinary results,” Sheikh Mohammed added.

“Our lives will be different after the COVID-19 pandemic. We don’t yet know the full extent of change, but it’s clear that the world is already being reshaped to varying degrees. This is an opportunity for us collectively to lay the groundwork to ensure a better future. Partnerships between the government and citizens, and between the public and private sectors will be key to achieving economic and social resilience, and ensuring sustainable development.”

Sheikh Mohammed mentioned that Dubai’s aim is to create a prosperous city for future generations, where everyone can achieve their dreams and aspirations, contribute their talent and innovation, access economic opportunities, and enjoy a good quality of life. This vision is laid out in our 50 year charter, and each year we outline key initiatives to deliver on our goals.

“By connecting Dubai to the world, and bringing the world together through Dubai, the Emirates Group will continue to play a key role as we work towards our vision.”

The Emirates Group on Sunday announced its 32nd consecutive year of profit, against a drop in revenue mainly attributed to reduced operations during the planned DXB runway closure in the first quarter, and the impact of flight and travel restrictions due to the COVID-19 pandemic in the fourth quarter.

Released on Sunday in its 2019-20 Annual Report, the Emirates Group posted a profit of Dhs1.7 billion (US$ 456 million) for the financial year ended 31 March 2020. 

The Group’s revenue reached Dhs104.0 billion ($28.3 billion). The Group’s cash balance was Dhs25.6 billion (US$ 7.0 billion), up 15% from last year mainly due to a strong business performance up to February 2020 and lower fuel cost compared to previous year.

Due to the unprecedented business environment from the ongoing pandemic, and to protect the Group’s liquidity position, the Group has not declared a dividend for this financial year after last year’s dividend of Dhs500 million (US$136 million) to the Investment Corporation of Dubai.

Sheikh Ahmed Bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group, said: “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.

“Even without a pandemic, our industry has always been vulnerable to a multitude of external factors. In 2019-20, the further strengthening of the US dollar against major currencies eroded our profits to the tune of Dhs1.0 billion, global airfreight demand remained soft for most of the year, and competition intensified in our key markets.

“Despite the challenges, Emirates and dnata delivered our 32nd consecutive year of profit, due to healthy demand for our award-winning products and services, particularly in the second and third quarters of the year, combined with lower average fuel prices over the year.

“Every year we are tested on our agility and ability. While tackling the immediate challenges and taking advantage of opportunities that come our way, our decisions have always been guided by our long-term goal to build a profitable, sustainable, and responsible business based in Dubai.”

In 2019-20, the Group collectively invested Dhs11.7 billion (US$3.2 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and employee initiatives, a decrease following last year’s record investment spend of Dhs14.6 billion (US$ 3.9 billion). It also continued to invest resources towards supporting communities, environmental initiatives, as well as incubator programmes that nurture talent and innovation to support future industry growth.

At the 2019 Dubai Air Show in November, Emirates placed a US$16 billion order for 50 A350 XWBs, and a US$8.8 billion order for 30 Boeing 787 Dreamliner aircraft. With first deliveries expected in 2023, these new aircraft will add to Emirates’ current fleet mix, and provide deployment flexibility within its long-haul hub model. In line with Emirates’ long-standing strategy to operate a modern and efficient fleet, these new aircraft will also keep its fleet age well below the industry average.