Emirates airline, stung by soaring fuel prices, posts $1.1 billion dollar loss
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Emirates operates aircraft at Dubai International Airport, United Arab Emirates.
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Dubai Emirates Airline suffered a loss $1.1 billion for the 12 months to March. That’s an improvement on the $5.5 billion loss it posted the prior year. However, rising fuel costs threaten to overshadow any recovery that is underway in global aviation.
Friday’s announcement by the world’s biggest long-haul carrier was that its revenue rose 91% to $16.1billion dollars. This helped to reduce losses as travel restrictions eased after the severe coronavirus pandemic. The airline also added more capacity.
According to Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Emirates Group and Chief Executive, “2021-22” was about recovery following the worst year in Group history.
“We anticipate the Group returning to profitability by 2022-23. We are working hard and keeping an eye on any headwinds, such as inflation, high fuel prices, higher COVID-19 variations, political and economic uncertainty, and high fuel costs.
The airline had resumed flights to 140 destinations by the end of March, but the surge in fuel prices — up more than 50% so far this year — continues to challenge the pandemic-battered aviation sector. Emirates claims that it has more than doubled its fuel costs to $3.8 billion due to the rising price of jet fuel and oil.
CNBC’s Sheikh Ahmed stated that it was difficult to predict where the price of oil will end or what extent it may fall. interview on TuesdayWhen asked about fuel prices. When asked about fuel costs, he said that “that’s really affecting airline business in big ways”. He also stated that Russia’s invasion and geopolitics were significantly impacting them.
Emirates claimed that fuel was responsible for 23% in operating expenses over the last year, and only 14% in 2020-21.
CNBC spoke with Alex Macheras an independent aviation analyst who said that Emirates’ recovery was aided by the recent openings of Asian markets. “Challenges will remain with China’s lockdowns continuing, fleet concerns amid Boeing 777 delays, and a cost-of-living-crisis globally that will be more visible [in terms of impacts]To airlines this winter.”
Track to IPO
Emirates Group (which includes Dnata and Emirates’ air services business) suffered a loss of $1 billion in the year. However, Dnata returned to profitability. Revenue for the group increased by 86%, to $18.1 billion. The cash balance of the group was also up 30% to $7 billion.
CNBC’s Sheikh Ahmed said that the company plans to reimburse the Dubai government some of its nearly $4 billion emergency aid it provided at the peak of the pandemic.
“That was money well-spent,” he stated. “If things continue as they are now … we can pay back what the Government has injected into the company.”
The announcement comes amid fresh speculation that Emirates, or one of its subsidiaries, could be used by Dubai’s government to make public a listing. list of businesses already earmarkedAs part of an effort by governments across the region to make their state-owned enterprises public, there will be an initial public offering.
Sheikh Ahmed stated that he was certain that Emirates would be listed on the stock market in the near future and that people could buy shares. “I don’t consider that point,” Heikh Ahmed said. However, he did not offer any other plans.
Dubai Airports: The Emirates’ home base attracted 13.6 million passengersNew data on Thursday shows that the traffic increased in the first quarter. CNBC spoke with Paul Griffiths from Dubai Airports, who said that Dubai’s air passenger traffic could reach its pre-pandemic level in 2024. That is one year sooner than originally expected and will provide a boost to Emirates during the recovery.
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