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FrenchPotatoEye
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Emirates 5.5bn Loss

Tue Jun 15, 2021 6:12 am

 
xwb777
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Emirates announces its 2020-2021 financial results

Tue Jun 15, 2021 7:32 am

The Emirates Group has today announced its results for the year 2020-2021.

Emirates has reported a loss of AED 20.3 billion (US$ 5.5 billion) down from AED 1.1 billion (US$ 288 million) profit in the previous year.

The airline’s Revenues declined by 66% to AED 30.9 billion (US$ 8.4 billion), due to the temporary suspension of passenger flights at its hub in March 2020 and ongoing global travel restrictions while the airline’s capacity has reduced to 24.8 billion ATKMs, with aircraft fleet size reduced by 11 aircraft.

The airline has retired 14 aircraft (9 B777-300ER & 5 A380).

Pax carried: 6m
LF: 44.3%

More can be found at: https://cdn.ek.aero/downloads/ek/pdfs/r ... pdf#page66
 
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FrenchPotatoEye
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 8:31 am

5 380 and 9 777 retired

Maybe pandemic force more out to retirement land?
 
MileHFL400
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 9:36 am

A6-EDB got retired. Any others?
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behramjee
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 11:30 am

What were the YOM of the 9 B77Ws that were retired?
 
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Boiler905
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 11:33 am

Operating Margin: -48.6%
Profit Margin: -65.6%
Employee Count: -32%

Given how few airplanes EK was flying during the pandemic compared to QR, even on cargo, I expected even worse results.

International travel bans only recently began to be lifted.

I wish we could see their cargo and charter revenue contribution during the pandemic, because they must have been strong given how much worse the results could have been.
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MIflyer12
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 12:37 pm

Boiler905 wrote:
I wish we could see their cargo and charter revenue contribution during the pandemic, because they must have been strong given how much worse the results could have been.


Cargo revenues were up 50+%. See the Annual Report in the OP's link.
 
DaCubbyBearBar
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 12:43 pm

That is a rather large amount…. Yikes
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lightsaber
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 12:44 pm

This is a staggering loss. EK will have no choice but to return as many aircraft as possible.

When the 777-300ERSF was launched, I thought feed stock would be dear. I no longer think that.

As it is a group, catering and ground handling were also hard hit.

EK wasn't the boogieman in 2019, they certainly will have to consolidate.
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LCDFlight
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 12:48 pm

Admitting you are in a deep hole can be the first step to climbing out. I am impressed. Good luck to them.
 
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 12:54 pm

I have to wonder how many more A380s will be parked, along with routes moved to FZ, especially with the MAX returning. They’re an airline begging to have the B789/B78X in their fleet, which would enable a single wide body pilot group down the line. (The 777 will be needed for cargo.)
 
Scotron12
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Re: Emirates announces its 2020-2021 financial results

Tue Jun 15, 2021 12:59 pm

xwb777 wrote:
The Emirates Group has today announced its results for the year 2020-2021.

Emirates has reported a loss of AED 20.3 billion (US$ 5.5 billion) down from AED 1.1 billion (US$ 288 million) profit in the previous year.

The airline’s Revenues declined by 66% to AED 30.9 billion (US$ 8.4 billion), due to the temporary suspension of passenger flights at its hub in March 2020 and ongoing global travel restrictions while the airline’s capacity has reduced to 24.8 billion ATKMs, with aircraft fleet size reduced by 11 aircraft.

The airline has retired 14 aircraft (9 B777-300ER & 5 A380).

Pax carried: 6m
LF: 44.3%

More can be found at: https://cdn.ek.aero/downloads/ek/pdfs/r ... pdf#page66


Yikes!! With a LF of -44.3%....they must be drooling for those 779s to arrive :D (Was reported that a recent 777 from India had only one pax).
 
Avgeek21
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Re: Emirates announces its 2020-2021 financial results

Tue Jun 15, 2021 1:06 pm

Scotron12 wrote:
xwb777 wrote:
The Emirates Group has today announced its results for the year 2020-2021.

Emirates has reported a loss of AED 20.3 billion (US$ 5.5 billion) down from AED 1.1 billion (US$ 288 million) profit in the previous year.

The airline’s Revenues declined by 66% to AED 30.9 billion (US$ 8.4 billion), due to the temporary suspension of passenger flights at its hub in March 2020 and ongoing global travel restrictions while the airline’s capacity has reduced to 24.8 billion ATKMs, with aircraft fleet size reduced by 11 aircraft.

The airline has retired 14 aircraft (9 B777-300ER & 5 A380).

Pax carried: 6m
LF: 44.3%

More can be found at: https://cdn.ek.aero/downloads/ek/pdfs/r ... pdf#page66


Yikes!! With a LF of -44.3%....they must be drooling for those 779s to arrive :D (Was reported that a recent 777 from India had only one pax).


That India flight story is out of context. Flights from India into UAE are almost all empty due to the entry ban. Only a few types of passengers are allowed under strict rules regarding testing and quarantine. Think certain types of medical workers, golden Visa holders or diplomats. Joe average can not fly into the UAE. Not until July 6th. For now...
 
VV
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 2:33 pm

I think they still have to take delivery of three or four A380.
 
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Revelation
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 2:39 pm

VV wrote:
I think they still have to take delivery of three or four A380.

Given there is no resale market for A380 other than scrap, maybe people who are suggesting EK's recovery will be difficult should be given more credence.
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VV
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 2:50 pm

Revelation wrote:
VV wrote:
I think they still have to take delivery of three or four A380.

Given there is no resale market for A380 other than scrap, maybe people who are suggesting EK's recovery will be difficult should be given more credence.


I hope Emirates or the owner (lessors) of those A380 have good value retention guarantees from Airbus.
 
DUSZRH
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Re: Emirates 6bn Loss

Tue Jun 15, 2021 2:59 pm

Boiler905 wrote:
Given how few airplanes EK was flying during the pandemic compared to QR, even on cargo, I expected even worse results.


You have to think the other way around, at least for PnL. They fly less, because additional flights would be loss making.
 
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Revelation
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 3:23 pm

aemoreira1981 wrote:
I have to wonder how many more A380s will be parked, along with routes moved to FZ, especially with the MAX returning. They’re an airline begging to have the B789/B78X in their fleet, which would enable a single wide body pilot group down the line. (The 777 will be needed for cargo.)

It's interesting that LH picked up five white tail 789s and are going to incorporate them into the fleet without LH standard interiors just to "right size" the airline as quickly as possible. LH has deleted 744, A343/6, A380 from their fleet already or will soon. I wonder why EK didn't make such a move. Suggests their hands are tied financially?
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
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lightsaber
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 3:40 pm

Revelation wrote:
aemoreira1981 wrote:
I have to wonder how many more A380s will be parked, along with routes moved to FZ, especially with the MAX returning. They’re an airline begging to have the B789/B78X in their fleet, which would enable a single wide body pilot group down the line. (The 777 will be needed for cargo.)

It's interesting that LH picked up five white tail 789s and are going to incorporate them into the fleet without LH standard interiors just to "right size" the airline as quickly as possible. LH has deleted 744, A343/6, A380 from their fleet already or will soon. I wonder why EK didn't make such a move. Suggests their hands are tied financially?

Errr... EK is 77W and A388 for pax duty. They are done if they tried to immediately downsize. In my opinion, EK is a zombie corporation at this time while LH lost money, they have a recovery path.

If EK survives, they will eventually need the 779s, we can debate when, but not for years. Yes, I question the viability as EK subsidizes Dubai and Dubai is, in my opinion, in one heck of a debt bubble.

EK depends on India re-opening as well as Europe, in particular the UK, re-opening. Since that is held on good vaccine supply (sorry, but the old school attenuated vaccines do not slow the transmission enough for good health policy, IMHO).

This will be, in my opinion, a "K" recovery and EK will hurt as too much of their business will hurt.

I was a huge fan if the Dubai model until the new IST was announced. That is too much competition IMHO.

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MIflyer12
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 4:00 pm

From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)
 
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Revelation
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 4:43 pm

MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

What seems to be different is AA/DL/UA/LH Group/IAG/AFKL seems to have a lot more flexibility in reacting to the sharp market crash and uneven recovery, whereas EK really has no choice but to sit back and wait till international trunk routes can support enough 77W and A380 service at good enough prices for them to make money. No wonder STC is so cranky.
Wake up to find out that you are the eyes of the world
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Wake now, discover that you are the song that the morning brings
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Nnaeto87
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 4:53 pm

Revelation wrote:
MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

What seems to be different is AA/DL/UA/LH Group/IAG/AFKL seems to have a lot more flexibility in reacting to the sharp market crash and uneven recovery, whereas EK really has no choice but to sit back and wait till international trunk routes can support enough 77W and A380 service at good enough prices for them to make money. No wonder STC is so cranky.

And this is what puts them at a huge disadvantage right. Everyone else can begin recovery much quicker than they can. Everyone has the right asset to meet varying levels of demand.

Everyone else is equipped for the different phases of recovery from the early to the latest stages.

EKs assets only support the latest stage of recovery and that’s looking like late 23 early 24
 
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 4:54 pm

MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

AA now cash profitable
https://www.keranews.org/business-econo ... ?_amp=true

DL cash profitable since April:
https://www.reuters.com/breakingviews/c ... 021-04-15/

The issue is their regional advantage seems to be, in my opinion, a disadvantage today. They were incredibly dependent upon flights to from UK, Europe, India, and Australia. I was impressed by their interconnecting model to fill an A380, but that breaks down when so many destinations are on a red list.

Before, large widebodies were an advantage in slot limited airports. Now I see flight vlogs on planes so empty from the UK, I cannot predict when the A380 can be profitable again and that will be in a world of 787-10s, A350s, and hopefully 779s. Not to mention I am a huge fan of hub bypass.

I believe expansion at the new IST, fewer conventions, Zoom, and in general longer range narrowbodies will hurt EK's recovery as their advantage of connecting everywhere to everywhere is a disadvantage in my opinion until we have full vaccination and we just cannot produce enough vaccine in 2021 to avoid numerous "red zone" countries.

I seriously question EK and Dubai's debt load. Please go back to my 2015 and earlier posts celibrating their business model. With new information my opinion changes and I have modeled international business travel where I disagree with the IATA. They predict a return to 2019 levels in 2023, I predict 2026 to 2028.
https://www.moodiedavittreport.com/iata ... rocessing/

With EK depending on that growth and mass air travel, I hope I am proven a pessimist in my opinion.


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dtw2hyd
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 5:07 pm

Emirates group has to cut down its staffing levels. 108K to 74k is progress, still way too high. 1 working while 4 gawking model should end, even it means fewer management positions.

Consolidate dnata and non core EK functions. That is the only way to identify redundancies.
All posts are just opinions.
 
Sean-SAN-
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 5:14 pm

lightsaber wrote:
MIflyer12 wrote:


It’s easier to be profitable when the US govt is paying half of your payroll. For Q1, Delta spent about 2.2B on payroll and received $1.2B back from the govt.
 
MIflyer12
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 5:26 pm

lightsaber wrote:
MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

AA now cash profitable
https://www.keranews.org/business-econo ... ?_amp=true

DL cash profitable since April:
https://www.reuters.com/breakingviews/c ... 021-04-15/


I wouldn't compare snapshot cash burn against net income inclusive of depreciation, write-downs, and financing costs for a 12-month period, particularly when that period is 1 April 2020 - 31 March 2021.
 
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ClassicLover
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 5:32 pm

lightsaber wrote:
Please go back to my 2015 and earlier posts celibrating their business model.


You would do everyone a favour if you linked to the posts in question, rather than referring to them. "Calibrating Emirates Business Model lightsaber" doesn't really find anything now.
I do enjoy a spot of flying, especially when it's not in economy!
 
dtw2hyd
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 5:51 pm

Sean-SAN- wrote:
It’s easier to be profitable when the US govt is paying half of your payroll. For Q1, Delta spent about 2.2B on payroll and received $1.2B back from the govt.


Lets not go there.

No body can build world's largest international carrier with $10 Million and two PIA planes.
EK is a state owned and subsidized carrier.
That is a fact even if 1000 paid bloggers repeating same thing.

US carriers get onetime bailout doesn't make them bad.
All posts are just opinions.
 
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ElroyJetson
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 6:27 pm

lightsaber wrote:
MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

AA now cash profitable
https://www.keranews.org/business-econo ... ?_amp=true

DL cash profitable since April:
https://www.reuters.com/breakingviews/c ... 021-04-15/

The issue is their regional advantage seems to be, in my opinion, a disadvantage today. They were incredibly dependent upon flights to from UK, Europe, India, and Australia. I was impressed by their interconnecting model to fill an A380, but that breaks down when so many destinations are on a red list.

Before, large widebodies were an advantage in slot limited airports. Now I see flight vlogs on planes so empty from the UK, I cannot predict when the A380 can be profitable again and that will be in a world of 787-10s, A350s, and hopefully 779s. Not to mention I am a huge fan of hub bypass.

I believe expansion at the new IST, fewer conventions, Zoom, and in general longer range narrowbodies will hurt EK's recovery as their advantage of connecting everywhere to everywhere is a disadvantage in my opinion until we have full vaccination and we just cannot produce enough vaccine in 2021 to avoid numerous "red zone" countries.

I seriously question EK and Dubai's debt load. Please go back to my 2015 and earlier posts celibrating their business model. With new information my opinion changes and I have modeled international business travel where I disagree with the IATA. They predict a return to 2019 levels in 2023, I predict 2026 to 2028.
https://www.moodiedavittreport.com/iata ... rocessing/

With EK depending on that growth and mass air travel, I hope I am proven a pessimist in my opinion.


Lightsaber



Your points are well taken. EK does not have the fleet flexibility to right size demand as the World slowly recovers from the pandemic. They went all in with their business model (I.e. connecting pax traffic from Europe and North America to the Indian Sub Continent, Southeast Asia, and Australia through their mega hub). It is clearly not viable to have a huge fleet of A380 and 77W aircraft when demand is so low.

You mentioned AA, that has the flexibility to substitute a 788 for a 77W as an example, as demand gradually increases. EK has no such flexibility.

I seriously questioned why they didn't acquire the 787-10 or A339 several years ago when there was talk of doing so. The cost of fueling aircraft burning 5500 kg per hour versus 7000-8000 kg per hour is obviously enormous.

I am not sure how EK survives this without massive cash infusions from the UAE. With talk of flights from IST to Australia, I agree there is too much competition. At least one of the ME3 will have to go. It will be interesting to see how it all shakes out.
 
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lightsaber
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 6:35 pm

ClassicLover wrote:
lightsaber wrote:
Please go back to my 2015 and earlier posts celibrating their business model.


You would do everyone a favour if you linked to the posts in question, rather than referring to them. "Calibrating Emirates Business Model lightsaber" doesn't really find anything now.

Sure here is one link, but once upon a time EK threads were prolific.

viewtopic.php?t=531601
lightsaber wrote:
I'm goign to be curious if the 2013 A388s will be SFO/LAX ready.    They should be... If so, San Paulo should also see the type within 3 years.

Lightsaber


in Tthat thread where we are discussing possible A380 routes.

While I didn't comment, one of the better old threads on EK:
viewtopic.php?f=3&t=415387

It was more a general comment on how the EK business model was very good, but then I changed my mind.

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Strato2
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 6:41 pm

Terrible result. Time to cancel those absolutely unneeded 779's ASAP and save cash as much as possible. EK can concentrate on premium passenger experience and discard torturing the pax with the 777-300 ER too and consolidate on the Superjumbo and fly only at best departure times.
 
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lightsaber
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 6:43 pm

ElroyJetson wrote:
lightsaber wrote:
MIflyer12 wrote:
From a quick look at the financials in the annual report the net result is overwhelmingly an operating loss, not due to asset write-downs of aircraft, parts, etc. It looks like only about $128 million (AED 500 million) was from an aircraft impairment charge. So, if they're going to have a significant fleet restructuring there's a lot more pain to come.

On the other hand, by ASKs EK had been about the size of AA/DL/UA/LH Group/IAG/AFKL, so in a global air travel downturn why wouldn't we expect them to lose a boatload of money pretty much like everybody else? (Yeah, maybe EK has a little more flexibility in labor contracts than do those western groups but a lot of airline cost is in line items other than labor expense.)

AA now cash profitable
https://www.keranews.org/business-econo ... ?_amp=true

DL cash profitable since April:
https://www.reuters.com/breakingviews/c ... 021-04-15/

The issue is their regional advantage seems to be, in my opinion, a disadvantage today. They were incredibly dependent upon flights to from UK, Europe, India, and Australia. I was impressed by their interconnecting model to fill an A380, but that breaks down when so many destinations are on a red list.

Before, large widebodies were an advantage in slot limited airports. Now I see flight vlogs on planes so empty from the UK, I cannot predict when the A380 can be profitable again and that will be in a world of 787-10s, A350s, and hopefully 779s. Not to mention I am a huge fan of hub bypass.

I believe expansion at the new IST, fewer conventions, Zoom, and in general longer range narrowbodies will hurt EK's recovery as their advantage of connecting everywhere to everywhere is a disadvantage in my opinion until we have full vaccination and we just cannot produce enough vaccine in 2021 to avoid numerous "red zone" countries.

I seriously question EK and Dubai's debt load. Please go back to my 2015 and earlier posts celibrating their business model. With new information my opinion changes and I have modeled international business travel where I disagree with the IATA. They predict a return to 2019 levels in 2023, I predict 2026 to 2028.
https://www.moodiedavittreport.com/iata ... rocessing/

With EK depending on that growth and mass air travel, I hope I am proven a pessimist in my opinion.


Lightsaber



Your points are well taken. EK does not have the fleet flexibility to right size demand as the World slowly recovers from the pandemic. They went all in with their business model (I.e. connecting pax traffic from Europe and North America to the Indian Sub Continent, Southeast Asia, and Australia through their mega hub). It is clearly not viable to have a huge fleet of A380 and 77W aircraft when demand is so low.

You mentioned AA, that has the flexibility to substitute a 788 for a 77W as an example, as demand gradually increases. EK has no such flexibility.

I seriously questioned why they didn't acquire the 787-10 or A339 several years ago when there was talk of doing so. The cost of fueling aircraft burning 5500 kg per hour versus 7000-8000 kg per hour is obviously enormous.

I am not sure how EK survives this without massive cash infusions from the UAE. With talk of flights from IST to Australia, I agree there is too much competition. At least one of the ME3 will have to go. It will be interesting to see how it all shakes out.

Well written post. I question where the UAE would get mass cash infusions. In particular as the other Emirates would want something from Dubai.

I don't know why EK bought more large aircraft when flexibility was required.

Longer range smaller planes will create bypass.

Lightsaber
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IADCA
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Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 6:44 pm

dtw2hyd wrote:
Sean-SAN- wrote:
It’s easier to be profitable when the US govt is paying half of your payroll. For Q1, Delta spent about 2.2B on payroll and received $1.2B back from the govt.


Lets not go there.

No body can build world's largest international carrier with $10 Million and two PIA planes.
EK is a state owned and subsidized carrier.
That is a fact even if 1000 paid bloggers repeating same thing.

US carriers get onetime bailout doesn't make them bad.


It's not one time. The airlines get bailouts after 9/11 as well, which now builds the expectation of future actions like those. But as you say, that's still different than being a state-owned and subsidized entity.
 
KingOrGod
Posts: 191
Joined: Mon Jan 16, 2017 3:19 pm

Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 8:43 pm

Revelation wrote:
aemoreira1981 wrote:
I have to wonder how many more A380s will be parked, along with routes moved to FZ, especially with the MAX returning. They’re an airline begging to have the B789/B78X in their fleet, which would enable a single wide body pilot group down the line. (The 777 will be needed for cargo.)

It's interesting that LH picked up five white tail 789s and are going to incorporate them into the fleet without LH standard interiors just to "right size" the airline as quickly as possible. LH has deleted 744, A343/6, A380 from their fleet already or will soon. I wonder why EK didn't make such a move. Suggests their hands are tied financially?


I honestly still believe the knee jerk reaction to kill off the A388 was not a smart move. Capacity is certain to return, just when and definitely not *if*. Just my opinion though...
 
KingOrGod
Posts: 191
Joined: Mon Jan 16, 2017 3:19 pm

Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 8:47 pm

dtw2hyd wrote:
Emirates group has to cut down its staffing levels. 108K to 74k is progress, still way too high. 1 working while 4 gawking model should end, even it means fewer management positions.

Consolidate dnata and non core EK functions. That is the only way to identify redundancies.


There is a good reason that DNATA stands for "Doing Nothing At The Airport"... :duck:
 
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lightsaber
Moderator
Posts: 22380
Joined: Wed Jan 19, 2005 10:55 pm

Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 9:43 pm

Forbes is not kind in their reporting:
https://www.forbes.com/sites/dominicdud ... iness/amp/

$3.1 bn in government support which is $1.1 bn more than previously known, 88% drop in business... plus repeated reporting of numbers we are already discussing.

As to the A380, the A35K and 779 will carry passengers for less. Since yield drops with increasing passenger numbers... I can see EK restarting A380s on all the trunk routes, just not multiple in a wave like before.

How are they handling London airports? What was the peak, 11 A380 per day? (4 LGW, others LHR, plus near London...). I'm going from memory, so correct me if off. So I see A380s returning, I just don't see the need for the quantity of flights.

Lightsaber
7 months without TV. The best decision of my life.
 
redflyer
Posts: 3910
Joined: Thu Feb 24, 2005 3:30 am

Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 10:56 pm

Nnaeto87 wrote:
And this is what puts them at a huge disadvantage right. Everyone else can begin recovery much quicker than they can. Everyone has the right asset to meet varying levels of demand.

Everyone else is equipped for the different phases of recovery from the early to the latest stages.

EKs assets only support the latest stage of recovery and that’s looking like late 23 early 24


Spot on. EK's business model is very unique, as are their aircraft requirements. That's not to say an airline such as, say, WN is not unique or their aircraft types, but EK's is unique with regards to the impact of the pandemic. Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact. I think when all is said and done, they will emerge from this a completely different airline, and with far less bravado. But they will survive - they have a huge center-mass that will carry them through to better days (IMHO).
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
dtw2hyd
Posts: 9056
Joined: Wed Jan 09, 2013 12:11 pm

Re: Emirates 5.5bn Loss

Tue Jun 15, 2021 11:07 pm

redflyer wrote:
Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact.


Their only plan was to drive others out of business, unfortunately for EK that didn't happen, even the worst ones were hanging by a thread.

Because of EK everyone else tightened their belts and were ready for rainy days.

And COVID happened. In a way others should thank Emirates.
All posts are just opinions.
 
User avatar
aemoreira1981
Posts: 3850
Joined: Mon Jan 09, 2017 12:17 am

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 3:04 am

dtw2hyd wrote:
redflyer wrote:
Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact.


Their only plan was to drive others out of business, unfortunately for EK that didn't happen, even the worst ones were hanging by a thread.

Because of EK everyone else tightened their belts and were ready for rainy days.

And COVID happened. In a way others should thank Emirates.


And now the new Istanbul airport, along with TK using much smaller planes deep into Africa (most of Africa is within the reach of the MAX).
 
randomdude83
Posts: 100
Joined: Fri Feb 01, 2019 5:52 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 3:37 am

On the talk about right sizing for the current market, I sense EK is very stuck with what it has until 2025 provided they even have the capital to acquire the dreamliners and a350s on order to right size.

Emirates has two roads they can consider now that have an immediate impact.

1- Merge with Fly Dubai and put the 737 in action.

2- Explore merger with Etihad of which they'll gain access to 50 dreamliners and a 320 series to right size but that will require the egos of Abu Dhabi and dubai rulers to be put aside to come together for the benefit of their country and save one good source of income and attraction for them.

both options are unlikely to happen but if done, can do the immediate turn around they're looking for.
 
SkyVoice
Posts: 483
Joined: Tue Feb 14, 2017 9:34 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 4:24 am

redflyer wrote:
Nnaeto87 wrote:
And this is what puts them at a huge disadvantage right. Everyone else can begin recovery much quicker than they can. Everyone has the right asset to meet varying levels of demand.

Everyone else is equipped for the different phases of recovery from the early to the latest stages.

EKs assets only support the latest stage of recovery and that’s looking like late 23 early 24


Spot on. EK's business model is very unique, as are their aircraft requirements. That's not to say an airline such as, say, WN is not unique or their aircraft types, but EK's is unique with regards to the impact of the pandemic. Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact. I think when all is said and done, they will emerge from this a completely different airline, and with far less bravado. But they will survive - they have a huge center-mass that will carry them through to better days (IMHO).


There is one other thing that happened. Actually, something that DIDN'T happen, but is supposed to happen, but not until this October. That is Expo 2020 Dubai. I believe that the powers that be at Emirates were looking forward in 2019 and before, hoping that both the ongoing real estate developments in Dubai and the Expo would provide a one-two punch of high-end tourism dollars. But, the pandemic cut both items down. Redflyer, I agree with you that EK will survive, as will the Dubai emirate itself, but not before everyone involved has many bottles of bitter pills to swallow.

https://www.expo2020dubai.com/

https://en.wikipedia.org/wiki/Expo_2020
Addicted to opiate painkillers for 25 years; sober since 3 April, 2012
 
Gremlinzzzz
Posts: 305
Joined: Fri Jan 24, 2020 4:28 am

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 4:52 am

aemoreira1981 wrote:
dtw2hyd wrote:
redflyer wrote:
Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact.


Their only plan was to drive others out of business, unfortunately for EK that didn't happen, even the worst ones were hanging by a thread.

Because of EK everyone else tightened their belts and were ready for rainy days.

And COVID happened. In a way others should thank Emirates.


And now the new Istanbul airport, along with TK using much smaller planes deep into Africa (most of Africa is within the reach of the MAX).
I can honestly tell you that if anyone is making trips to Africa with narrow bodies, then they are not going to compete. Cargo is a huge part of that business.
 
Gremlinzzzz
Posts: 305
Joined: Fri Jan 24, 2020 4:28 am

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 5:02 am

randomdude83 wrote:
On the talk about right sizing for the current market, I sense EK is very stuck with what it has until 2025 provided they even have the capital to acquire the dreamliners and a350s on order to right size.

Emirates has two roads they can consider now that have an immediate impact.

1- Merge with Fly Dubai and put the 737 in action.

2- Explore merger with Etihad of which they'll gain access to 50 dreamliners and a 320 series to right size but that will require the egos of Abu Dhabi and dubai rulers to be put aside to come together for the benefit of their country and save one good source of income and attraction for them.

both options are unlikely to happen but if done, can do the immediate turn around they're looking for.


I personally do not see a scenario where Etihad, who have been making changes, and who have been shrinking to try and turn around their operation will merge with Emirates. Not when Abu Dhabi wants to diversify its own economy.
 
User avatar
LAX772LR
Posts: 13975
Joined: Sun Nov 09, 2014 11:06 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 7:01 am

Revelation wrote:
VV wrote:
I think they still have to take delivery of three or four A380.

Given there is no resale market for A380 other than scrap, maybe people who are suggesting EK's recovery will be difficult should be given more credence.

:checkmark: :checkmark: :checkmark: I still get called crazy for suggesting that buying 100+ A380s, for an airline whose longhaul ambitions had never truly been tested in a significant downturn, was asinine.

Still waiting to be proven wrong.

Perhaps someday I will, but it's worth pointing out that this is the first major downturn that EK's had to face since amassing that ridiculously-inflexible fleet. Their superjumbo fleet was a fraction of its eventual size during 2008. And sure 2020 "was a downturn like no other"-- but then again, we've now said that about three different periods over the last 20yrs. What's coming next?
I myself, suspect a more prosaic motive... ~Thranduil
 
avier
Posts: 1251
Joined: Tue Aug 07, 2018 12:38 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 7:34 am

lightsaber wrote:
I believe expansion at the new IST, fewer conventions, Zoom, and in general longer range narrowbodies will hurt EK's recovery as their advantage of connecting everywhere to everywhere is a disadvantage in my opinion

The new IST atleast won't be eating into EK's India market, as that is very much restricted for TK ; they're allowed only 14 weekly services between IST- India, which they split equally with one daily to BOM & DEL each. It has been that way since a very long time and likely won't change soon, as it depends on the political relations between the two countries (which is weak) and AI lobbying.
So one of EK's core market will be secured i.e India to the West.

Business traffic may remain down due reasons you mentioned, but leisure traffic will rebound bigger than before due pent up demand.
The student traffic share alone from India is so large, which was about 1mn flying out in the year 2019 ! And this traffic isn't cooling down so much due to the pandemic. The US and many other countries are allowing students to enter under permitted category of visa.
https://news.careers360.com/over-10-lak ... id-they-go
https://www.thehindubusinessline.com/ne ... 455393.ece
 
Airlinerdude
Posts: 246
Joined: Tue Mar 30, 2010 3:07 am

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 7:49 am

Unsurprisingly an absolutely terrible year for EK. From a capacity standpoint, (measured in ATKMs) EK operated similar capacity to that last seen in the 2007-2008 financial year. It seems Covid knocked off 13 years of growth. It also appears that for the first time in its history, EK operated primarily as a cargo carrier, deriving the majority of its revenue from freight during the year.

A few positive observations:

    -The loss in the second half of the FY was about 28% less than the first half of the financial year.
    -Revenues compared to the second half were 163% greater than the first half of the financial year.
    -The Group's cash balance declined by only $200m since September 30, 2020. Less the additional $1.3b of additional equity injection and $1.98b of term loan proceeds ($3.95b assumed to be an inflow equally throughout the year), that means the cash burn was about $18m a day during the second half of the year. In the first half, less the $2bn equity injection and $1.98b term loan proceeds, the cash burn was closer to $29.5m a day. So cash burn improved by about 40% in the second half of the year.
    -Approximately $2.82b of cash flow movement related to refunds meaning that operations were actually $1.09b cash flow positive for the year.
    -The two 380s (EVP/EVO) that have been or are to be received in the 2021/2 financial year have committed financing through term loans.
    -Cargo yields increased by 88%.

Some of the more concerning observations:

    -Revenue passenger KMs were about 10% of the prior financial year. Overall, passenger revenue was down 85%.
    -Without the government equity injections, the airline would have been about $1b away from being in a negative equity position.
    -Current lease liabilities for 2021 are about $2.3b which is consistent with 2020 levels which tends to imply EK wasn't very successful at deferring payments/renegotiation of leases.
    -Capital commitments for the 2021/2 FY are $9b with only $6.3b of current assets on hand and EBITDA to debt service levels at 3 months (prior years were 12-16 months). Either cash commitments will have to be slashed, or another cash raise will likely be required if operating cash flows don't improve significantly.
    -At March 31, 2021, only about 13% of the A380s were flying.
    -EK's former top 10 largest destinations by passenger capacity are almost all closed/limited at the moment (BKK, LHR, KHI, KWI, HKG, SIN, SYD, BOM, MAN, JNB).
    -Staffing levels appear bloated at about 43% more staff compared to the same capacity offered in 07/08.
 
DanielsBrawley
Posts: 9
Joined: Tue May 18, 2021 12:02 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 8:34 am

This is absolutely gut wrenching. For my friends left at EK they are on pins and needles. For anyone thinking this is "better than expected" don't be misinformed. This news is staggeringly bad and can't be spun any other way. Despite their past successes and crazy good business model a 5.5B loss can't be marginalized. We're still so far from being normalized on international there's no light in that tunnel.....yet.
 
User avatar
AirIndia
Posts: 1302
Joined: Sun Jan 14, 2001 2:43 am

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 9:14 am

Airlinerdude wrote:
Unsurprisingly an absolutely terrible year for EK. From a capacity standpoint, (measured in ATKMs) EK operated similar capacity to that last seen in the 2007-2008 financial year. It seems Covid knocked off 13 years of growth. It also appears that for the first time in its history, EK operated primarily as a cargo carrier, deriving the majority of its revenue from freight during the year.

A few positive observations:

    -The loss in the second half of the FY was about 28% less than the first half of the financial year.
    -Revenues compared to the second half were 163% greater than the first half of the financial year.
    -The Group's cash balance declined by only $200m since September 30, 2020. Less the additional $1.3b of additional equity injection and $1.98b of term loan proceeds ($3.95b assumed to be an inflow equally throughout the year), that means the cash burn was about $18m a day during the second half of the year. In the first half, less the $2bn equity injection and $1.98b term loan proceeds, the cash burn was closer to $29.5m a day. So cash burn improved by about 40% in the second half of the year.
    -Approximately $2.82b of cash flow movement related to refunds meaning that operations were actually $1.09b cash flow positive for the year.
    -The two 380s (EVP/EVO) that have been or are to be received in the 2021/2 financial year have committed financing through term loans.
    -Cargo yields increased by 88%.

Some of the more concerning observations:

    -Revenue passenger KMs were about 10% of the prior financial year. Overall, passenger revenue was down 85%.
    -Without the government equity injections, the airline would have been about $1b away from being in a negative equity position.
    -Current lease liabilities for 2021 are about $2.3b which is consistent with 2020 levels which tends to imply EK wasn't very successful at deferring payments/renegotiation of leases.
    -Capital commitments for the 2021/2 FY are $9b with only $6.3b of current assets on hand and EBITDA to debt service levels at 3 months (prior years were 12-16 months). Either cash commitments will have to be slashed, or another cash raise will likely be required if operating cash flows don't improve significantly.
    -At March 31, 2021, only about 13% of the A380s were flying.
    -EK's former top 10 largest destinations by passenger capacity are almost all closed/limited at the moment (BKK, LHR, KHI, KWI, HKG, SIN, SYD, BOM, MAN, JNB).
    -Staffing levels appear bloated at about 43% more staff compared to the same capacity offered in 07/08.


Well summarised.
 
aytdxb
Posts: 28
Joined: Tue Sep 24, 2019 3:18 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 9:20 am

SkyVoice wrote:
redflyer wrote:
Nnaeto87 wrote:
And this is what puts them at a huge disadvantage right. Everyone else can begin recovery much quicker than they can. Everyone has the right asset to meet varying levels of demand.

Everyone else is equipped for the different phases of recovery from the early to the latest stages.

EKs assets only support the latest stage of recovery and that’s looking like late 23 early 24


Spot on. EK's business model is very unique, as are their aircraft requirements. That's not to say an airline such as, say, WN is not unique or their aircraft types, but EK's is unique with regards to the impact of the pandemic. Of all the bad-scenarios they could have analyzed and figured out a way to insulate themselves against for survival, the pandemic was something that they (nor anyone else) could have foreseen and, unfortunately for them, has had the most severe impact. I think when all is said and done, they will emerge from this a completely different airline, and with far less bravado. But they will survive - they have a huge center-mass that will carry them through to better days (IMHO).


There is one other thing that happened. Actually, something that DIDN'T happen, but is supposed to happen, but not until this October. That is Expo 2020 Dubai. I believe that the powers that be at Emirates were looking forward in 2019 and before, hoping that both the ongoing real estate developments in Dubai and the Expo would provide a one-two punch of high-end tourism dollars. But, the pandemic cut both items down. Redflyer, I agree with you that EK will survive, as will the Dubai emirate itself, but not before everyone involved has many bottles of bitter pills to swallow.

https://www.expo2020dubai.com/

https://en.wikipedia.org/wiki/Expo_2020


this is unfortunately just wishfull thinking. expo didnt create any demand and this has nothing to do with pandemic. And nothing will change for this year. High-end tourism dollars are long gone, dubai by now is a mass tourism destination and EK has to adopt itself. Fares has to be really competitive to be able to attract winter tourism from europe, unfortunately there arent too many repeat tourists. Dubai (and emirates) has to focus on new source markets and not sure if the curent fleet is suitable for that. This is of course just from tourism perspective.
 
xwb777
Posts: 1137
Joined: Wed Jan 17, 2018 4:13 pm

Re: Emirates 5.5bn Loss

Wed Jun 16, 2021 9:47 am

The A380s that has left the fleet:

A6-EDA
A6-EDF
A6-EDG
A6-EDH
A6-EDP

Source:Aviation Journalist Andreas Spaeth LinkedIn

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