The Middle East’s largest airline, Emirates, announced on Tuesday a net loss of $5.5 billion over the past year as revenue fell by more than 66% due to global travel restrictions sparked by the coronavirus pandemic.
It marks the first time in more than three decades that the Dubai-based airline’s parent group has not churned out a profit, underscoring just how dramatic an impact COVID-19 has had on the aviation industry.
The airline said its total passenger and cargo capacity declined by 58% over the past year. Emirates had squeezed out profits of $288 million the previous year.
The airline carried just 6.6 million passengers last year, a staggering decline of nearly 90% from the previous year.
Emirates Group, which also operates dnata travel and ground services at airports, reported a total loss of $6 billion.
The long-haul carrier, which is state-owned, was thrown a $2 billion lifeline from Dubai’s government to stave off a liquidity crunch last year in a clear indication of how dire the situation had become for one of the world’s leading airlines.
The airline was forced to ground all passenger flights for nearly eight weeks starting in March 2020 amid a temporary closure of airports in the United Arab Emirates, including transit flights through Dubai the hub for Emirates and the world’s busiest airport for international travel.
A brief statement issued by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum at the start of the company’s annual report noted how the pandemic “has been one of the biggest challenges humanity has faced.”
He noted his own country’s handling of the pandemic, which has varied widely from one emirate to the next and depended heavily on the decisions of its local rulers.
“We have been tested in our ability to deal with this unforeseen situation, but we have emerged out of it tougher,” he said.
The airline, known worldwide for its luxury first-class cabins, quality service and modern aircraft, received three new Airbus 380 aircraft over the past year and phased out 14 older aircraft. It now operates a fleet of 259 planes, including cargo.
The company noted that despite the financial losses, it remains committed to its order booking for 200 new aircraft as part of its “long-standing strategy of operating a modern and efficient fleet.”