Emirates Airlines won’t pay owners’ shares after profits decline

Emirates Group announced that its profits during the fiscal year 2019 – 2020 decreased by 28 percent, as revenues were affected by the Coronavirus pandemic in the fourth quarter.

The Dubai-based group said in a statement that profits reached 1.7 billion dirhams ($456 million) during the fiscal year ending March 31, 2020.

The group’s profits amounted to 2.3 billion dirhams ($626 million) during the 2018-2019 fiscal year.

According to the statement, the group’s revenues amounted to 104 billion dirhams (28.3 billion dollars), a five percent decline from last year’s results, and cash balances reached 25.6 billion dirhams (7.0 billion dollars), a growth of 15 percent over the previous year, thanks to strong performance until February 2020, lower oil prices compared to the previous year.

And the group said that given the unprecedented global economic conditions and to maintain financial liquidity, the group decided not to provide a share of the profits to the owners this year.

The group explained that during the fiscal year 2019 – 2020, 11.7 billion dirhams ($3.2 billion) were invested in the purchase of new aircraft and equipment, a retreat from last year’s investments which reached a record level of 14.6 billion dirhams ($3.9 billion).

The statement pointed out that the profits of Emirates Airlines (affiliated to the group) increased by 21% during the period, to 1.05 billion dirhams (286 million dollars), from 871 million dirhams (237 million dollars) from last fiscal year.

The same statement quoted the CEO of Emirates Airlines and Ahmed bin Saeed Al Maktoum as saying: During the first 11 months of the fiscal year 1019/2020, Emirates Airlines and Dnata achieved strong performance, and we were on our way to achieving our set goals.”

However, he added that things started to turn upside down since mid-February due to the spread of the COVID-19 pandemic in different regions of the world, which caused a huge decrease in the demand for air travel, as countries in turn began to close their borders and impose severe restrictions on travel”.

“Our industry is always vulnerable to being affected by many external factors, even without a pandemic,” he added.

In this regard, he pointed out that the growing strength of the US dollar against major currencies during the 2019-2020 fiscal year has eroded our profits by an estimated one billion dirhams. The demand for air freight also remained sluggish for most of the year, while competition intensified in our main markets.

The outbreak of the Coronavirus resulted in the overthrowing of global economic sectors, and increased pressure on vital sectors such as air transport and airlines – which were already suffering before the outbreak of the disease – which would accelerate the bankruptcy of some companies.

The frequency of flight cancellations increased by nearly 85 percent for some companies, and airlines began immediate layoffs or salary cuts, amid the horror spreading by Coronavirus.

In early March, Emirates Airlines asked its employees to take leave, as part of the implications of the outbreak of the Coronavirus, and its impact on flights around the world.

The company employs more than 100,000 employees, including more than 21,000 aircraft crews, and 4,000 pilots at the end.

The Dubai government said in March that it would pump funding to the airline. The company said in its annual report that Dubai will support it financially if necessary.

In March, Emirates Airlines reduced its wages temporarily due to the Coronavirus pandemic. It was not clear when it would resume its regular flights.