Dubai gov’t intervenes as Emirates incurs billions in losses

Emirates (EK, Dubai Int’l) received a further USD1.1 billion in support from the Dubai government as the impact of Covid-19 on long-haul travel wreaked havoc on its balance sheet. The airline posted a USD5.5 billion loss this week for the year ending March 31, its first annual loss in 32 years, as revenue fell 66% to USD8.4 billion. The result was a swing from a USD288 million profit the previous year. Entirely Dubai government-owned Emirates has now received state equity injections totalling USD3.1 billion in exchange for stock rights, including USD2 billion it obtained last year. The annual loss was the biggest the carrier had recorded, and only its third-ever following losses in 1986, its first year in operation, and 1988, an Emirates representative told Reuters. Emirates said that Dubai would continue to support the company, which has helped transform the city in the United Arab Emirates into a major international aviation hub over three decades. Qatar Airways (QR, Doha Hamad Int’l), another Gulf carrier with a similar business model, and likewise with no domestic market to cushion it, revealed last month that it had accepted USD3 billion in support from its owner, the Qatari government, since the start of the pandemic. It has not yet reported its annual results. Emirates said that 44.3% of its seats on flights were occupied during the year, down from 78.4% the previous year. It carried the lowest number of passengers in 20 years, about 6.6 million of them. It stripped back capacity by 82.6% year-on-year as it based operations on its fleet of B777s, 19 of which have been emptied of seats to carry cargo. According to the ch-aviation fleets advanced module, it operates 124 B777-300(ER)s and ten B777-200(LR)s along with eleven B777-Fs. Its 118 A380-800s complete Emirates’ fleet, the majority of which have been grounded. Five more A380s have been removed from operation and will be retired, the airline told Airline Ratings on June 17: A6-EDA (msn 11), A6-EDF (msn 7), A6-EDG (msn 23), A6-EDH (msn 25), and A6-EDP (msn 77).