Emirates, Dubai’s airline, announced Tuesday annual losses of about 4.5 billion euros, the first in more than three decades due to blockades and restrictions related to the coronavirus pandemic that hit the aviation sector hard.
That’s a colossal number. “Due to flight and travel restrictions related to the pandemic, the airline recorded a loss of 20.3 billion dirhams (more than €4.5 billion), after a profit of 1.1 billion dirhams (nearly €247 million) last year,” Emirates said in a statement. The airline, which like the others was forced to temporarily suspend operations in the spring of 2020, saw its revenue fall 66% to €6.9 billion.
In the fiscal year, which ends in March, Emirates carried 6.6 million passengers, down 88% from the same period last year, (March 2019 to March 2020). The group has been “hit hard by the decline in demand for international air travel as countries have closed their borders and imposed strict restrictions on travelers,” said its chief executive officer, Sheikh Ahmed bin Said Al-Maktoum, quoted in the statement. “No one knows when the pandemic will be over, but we know that the recovery will be uneven,” he said.
Against this backdrop, redundancies have hit all sectors of the group “for the first time” in its history, with the workforce reduced by 31% to 75,145 employees. The Emirates Group includes Emirates Airlines and Dnata, its air and airport services arm. Emirates Airlines alone cut 32% of its staff from 60,033 to 40,801, including a horde of pilots, stewards and flight attendants from around the world who were let go during the year.
The last time the company recorded a loss was in the 1987-88 financial year, when it started operations. Since then, Emirates has become the largest airline in the Middle East, linked to Dubai’s airport, which has the largest number of foreign passengers. “Economies and companies that entered the pandemic period in a strong position will be in a better position to rebound,” the CEO stressed, referring to the group’s good health before the health crisis. Emirates has received some 2.5 billion euros from the Dubai government, and Dnata has drawn on various support programs, according to the group.
Return of tourism
Dubai reopened its doors to international tourism in July 2020, attracting many visitors seeking an escape from the more or less strict confines imposed around the world. Emirates currently serves 157 destinations, almost covering its pre-pandemic network of 158 destinations in 85 countries. Tourism is an economic mainstay of Dubai, an oil-poor emirate with the most diversified economy in the Gulf region. It welcomed more than 16 million visitors in 2019. Before the pandemic, the goal was to reach 20 million by 2020.
Life has largely returned to normal in Dubai, with restaurants, hotels and beaches wide open to the public. The United Arab Emirates, of which Dubai is one of seven principalities, has launched one of the fastest vaccination campaigns in the world. The International Air Transport Association (IATA) has reported great interest from Gulf airlines in its anti-Covid health pass, which it says will be rolled out “in the coming weeks” in the Middle East. Emirates and Etihad, the airline of Abu Dhabi, the capital of the Emirates, have both said that passenger demand may not return to pre-Health Crisis levels until 2023.