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The Emirates Group today reported that 2022-23 will be its most profitable year ever, underpinned by strong demand across its business. Emirates posted a record profit, completely reversing last year’s losses.
Both Emirates and dnata will see significant revenue growth in 2022-23 as the group expands its air transport and travel-related businesses after virtually all pandemic-related restrictions are lifted globally.
The Emirates Group posted a record profit of 10.9 billion dirhams ($3 billion) for the financial year ending March 31, 2023, compared with a loss of 3.8 billion dirhams ($1 billion) last year.
The group’s revenue was 119.8 billion dirhams ($32.6 billion), up 81 percent from last year. The group’s cash balance of AED42.5 billion ($11.6 billion) was the highest ever, up 65 percent from last year, mainly due to strong demand in its core business units and markets, the group said.
Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive Officer of Emirates Airline and Group, said: “We are proud of our performance in 2022-23, which is not only a full recovery , and a record-setting achievement. This achievement would not be without His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, whose leadership has served us today and for many years Its future success will be critical. The architect of Dubai’s progressive economic policies, His Highness Sheikh Mohammed, is also the engine behind the trajectory of the Emirates Group. Without his drive and support, Emirates would be half the size we are today.”
He added: “I am proud of the Emirates Group’s performance in 2022-23 and our contribution to revitalizing air transport and tourism in the markets we serve, including a 97% year-on-year increase in international arrivals to Dubai, which Shocked. 2022.
“The group is the largest player in the UAE’s aviation industry, supporting more than 770,000 jobs and an estimated contribution to GDP of more than US$47 billion (AED172.5 billion). In line with our growth plans, and in line with Dubai Economic Agenda D33, We hope to significantly increase our contribution to the UAE’s GDP over the next decade through direct and indirect employment, supply chain spending, tourism spending, and trade and business benefits from the movement of goods.”
Commenting on the group’s turnaround in 2022-23, Sheikh Ahmed said: “We had anticipated a strong return to travel, and with the lifting of travel restrictions last time causing a wave of demand, we were prepared to scale up our business quickly and safely to Serving our customers. Our continued investments in our brands, products and services help drive customer preference and position us well in the marketplace. As a result, we achieved record financial performance and Cash balance. This reflects the strength of our proven business model, our careful forward planning, the hard work of all of our employees, and our strong partnerships across the aviation and travel ecosystems.”
During the year, Emirates and dnata stepped up their global recruitment efforts to support the expansion of the business and strengthen the Group’s future capabilities. As a result, the Group’s total workforce increased by 20% to 102,379 employees, representing more than 160 different nationalities.
In 2022-23, the group is investing a total of AED 7.2 billion (US$ 2 billion) in new aircraft, facilities, equipment, companies and the latest technology to prepare the business for future growth.
The group’s commitments include: a massive multibillion-dollar aircraft cabin revamp program; an order for five new 777 freighters; a new pilot training center; and a partnership with CropOne to open the world’s largest vertical farm in Dubai Bustanica; a new training aircraft for Emirates Flight Training Academy cadets; dnata’s acquisition of a 30% stake for full ownership of its ground handling operations in Brazil; and construction of a new state-of-the-art cargo facility in Erbil, Iraq.
The Emirates Group also continued its sustainability journey this year. Notably, it is a signatory to the United Nations Global Compact, a voluntary initiative in which Emirates and dnata will commit to making the United Nations Sustainable Development Goals (SDGs) and principles part of its strategy, culture and operations. The group also signed the UAE Gender Balance Council’s commitment to increase the national representation of women in middle and senior management positions to 30% by 2025.
Among Emirates’ many environmental initiatives, a key highlight for Emirates was the successful demonstration flight using 100% Sustainable Aviation Fuel (SAF) in one of the Boeing 777’s engines. This region-first initiative contributes to collective industry data and efforts to achieve a future of 100% SAF flying. dnata has committed to invest US$100 million (AED367 million) over two years in 2022-23 to improve the environmental efficiency of its global operations, supporting its aim to reduce its carbon footprint by 50% by 2030.
Sheikh Ahmed said: “In 2022-23, we have not only restored most of our operations, but also expanded our footprint and capabilities by investing in people, products and new technologies – demonstrating our agility and capabilities .We will continue to maintain a strong strength to lay the foundation for future success, and work hand in hand with partners to grow our business and collaborate on innovative solutions for travel and aviation.As our business expands, we The ability to make a positive impact in communities is also growing. We are steadfast in our commitment to delivering value to our customers and stakeholders while minimizing our impact on the environment.
“We enter 2023-24 with a strongly positive outlook and expect the group to remain profitable. We will work hard to achieve our targets while keeping a close eye on inflation, high oil prices and political and economic uncertainty.”
Emirates performance
Emirates’ combined passenger and cargo capacity grows by 32% to 48.2 billion passenger-kilometres in 2022-23, as the airline continues to restore its entire network in line with the lifting of pandemic-related flight and travel restrictions passenger transport services.
In addition to launching services to Tel Aviv, Emirates has re-launched flights to six destinations throughout the year and added operations to 62 cities across its network to meet strong customer demand. By 31 March 2023, Emirates’ network covers 150 destinations on six continents, nine of which are served by its cargo-only fleet.
Emirates’ order stands for 200 aircraft, including an additional five Boeing 777-300ER freighter orders announced for 2022-23. The airline’s long-term strategy of operating modern and efficient aircraft remains unchanged, a commitment that underpins its Fly Better brand promise, as a younger fleet is good for the environment, operations and customers.
Emirates’ total revenue for the financial year rose 81% to AED107.4 billion (US$29.3 billion), following a marked increase in capacity deployment in most markets. Currency fluctuations in some of the airline’s key markets, notably the depreciation of the euro, British pound and Pakistani rupee, had a negative impact of AED 4.5 billion (US$ 1.2 billion) on the airline’s profitability.
Total operating costs increased by 57% compared to the previous financial year. Ownership costs (depreciation and amortization) and fuel costs are the airline’s two largest cost components in 2022-23, followed by staff costs. Fuel accounts for 36% of operating costs, compared to 23% in 2021-22. The airline’s fuel bill rose 143 percent to AED33.7 billion ($9.2 billion) compared with the previous year, as average fuel prices rose 48 percent amid a 49 percent increase in capacity expansion.
As pandemic-related travel restrictions were lifted around the world, the airline sharply improved its financial performance and posted a record profit of AED10. 2.9 billion), with an unusually high profit margin of 9.9%, reflecting the best performance in the airline’s history.
Emirates will carry 43.6m passengers (up 123%) in 2022-23, with seat capacity up 78%. The airline reported a passenger seat factor of 79.5%, compared to 58.6% last year; passenger yield increased 7% to 37.5 fils per revenue passenger kilometer (RPKM) due to changes in cabin and route mix, fares and currencies (10.2 cents).
Emirates continues to invest in delivering a better customer experience. During the year, it launched a full premium economy class experience to great customer acclaim, refreshed the cabin interiors of the first six newly refitted A380s, and opened a modern concept retail store, Emirates World, which The store will gradually become introduced to other major markets. It also announced a $350 million investment to develop a next-generation inflight entertainment system for its A350 fleet.
Emirates Cargo
Emirates SkyCargo performed solidly, contributing 16% of the airline’s revenue, despite reduced available capacity as planes temporarily converted to “mini-freighters” resumed full passenger service during the pandemic.
In 2022-23, Emirates’ Cargo division strengthens its leadership in cold chain transportation, with advanced expertise and infrastructure making it the carrier of choice for transporting temperature-sensitive medicines and other perishable items during the pandemic .
Emirates’ cargo division achieved steady revenue of AED 17.2 billion (US$ 4.7 billion) on the back of steady airfreight demand throughout the year. That’s down 21% from last year’s stellar performance due to the pandemic.
hotel portfolio
Emirates’ hotel portfolio revenue rose 12 percent to AED675 million (US$184 million) from last year, reflecting increased tourism traffic, particularly in Dubai.
Emirates has consistently demonstrated its ability and commitment to meet its contractual obligations. It has also managed to repay AED3 billion (US$817 million) of the total of AED17.5 billion (US$4.8 billion) raised during the Covid-19 crisis, in addition to repaying maturing aircraft-related financing liabilities. This assurance continues to bolster the confidence of its financing partners in its business model and enables Emirates to reprice AED4.5 billion (US$1.2 billion) of debt and raise a further AED1. For the purchase of two new B777 freighters, it said the aircraft were purchased at high effective margins through Islamic financing leases.
Emirates ended the financial year with cash assets of AED 37.4 billion (US$ 10.2 billion), 79% higher than on March 31, 2022.
data performance
Nearly all of dnata’s businesses have recovered from the pandemic, with dnata’s profits up 201% to AED331m ($90m) in 2022-23.
dnata’s total revenue rose 74 percent to AED14.9 billion ($4.1 billion) as global flight and travel activity increased. dnata’s international business accounted for 72% of its revenue, up 10% from the previous year. During the year, dnata worked closely with its clients to address the challenges of labor shortages and rising inflation in key markets including the UK, US, Europe and Australia. –trade arab news agency
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