Emirates Airline, affected by soaring fuel prices, loses $1.1 billion
Aircraft operated by Emirates, at Dubai International Airport in the United Arab Emirates.
Christopher Pike | Bloomberg | beautiful pictures
Dubai’s Emirates airline narrowed its loss to $1.1 billion in the year to March, even as soaring jet fuel costs threatened to overshadow recovering travel demand.
The world’s largest long-haul carrier said revenue jumped 91% to $16.1 billion, as cruise restrictions eased and the airline added capacity. Emirates lost $5.5 billion last year.
“2021-22 is largely about recovery, after the most difficult year in our Group history,” said Emirates Group President and CEO Sheikh Ahmed bin Saeed Al Maktoum.
“We expect the Group to be profitable again in 2022-23 and are working to achieve our targets, while closely monitoring difficulties such as high fuel prices, inflation, volatility, and inflation. new COVID-19 outbreak and political and economic uncertainty.”
The airline resumed flights to 140 destinations at the end of March, but soaring fuel prices – up more than 50% so far this year – continue to challenge The aviation sector is plagued by a pandemic. Emirates says its fuel bill has more than doubled to $3.8 billion as the price of oil and jet fuel has skyrocketed in recent quarters.
Sheikh Ahmed told CNBC in a Interview on Tuesday when asked about fuel prices. “That’s really had a big impact on the airline business,” he added, noting that geopolitics and Russia’s invasion of Ukraine are having a significant impact on fuel prices.
Emirates says fuel accounted for 23% of operating costs for the year, compared with just 14% in 2020-21.
Alex Macheras, an independent aviation analyst, told CNBC: “The relatively recent reopening of key markets in Asia is key to Emirates’ recovery. “Challenges will continue with China’s continued shutdown, fleet concerns amid Boeing 777 aircraft delays and the global cost-of-living crisis will become more apparent. [in terms of impacts] for airlines this winter. “
Link to IPO
The Emirates Group, which includes Emirates and its air services business Dnata, recorded an annual loss of $1 billion, although Dnata was profitable again. The group’s revenue increased 86% to $18.1 billion and the group ended the year with a 30% improvement in its cash balance to $7 billion.
Sheikh Ahmed told CNBC that the consortium now plans to pay back the Dubai government some of the nearly $4 billion in emergency relief it pumped into the airline during the pandemic.
“It’s money well spent,” he said. “If things continue as they are now … we can give back what the Government injected into the company.”
It comes amid new speculation that Emirates or its subsidiaries could be exploited by the Dubai government to list shares, join a list of businesses that have been bookmarked to go public for an initial public offering as part of a push for governments in the region to take their state-owned enterprises public.
Sheikh Ahmed said: “I am sure that maybe at some point in the future Emirates will be on the market and people will be able to buy shares. “I don’t call that a point,” he added, stopping short of making any other plans.
Dubai airports, Emirates home ground, attracting 13.6 million passengers in the first quarter, according to new data released on Thursday. Dubai Airports CEO Paul Griffiths told CNBC that air passenger traffic in Dubai could reach pre-pandemic levels by 2024, a year earlier than previously expected, providing a headwind for Dubai. Emirates in recovery.