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Emirates Group reports first loss in over 30 years

Revenue from dnata’s travel services division fell by 96% to $35 million as Covid pushed owner Emirates Group into its first annual loss in more than 30 years.

The Dubai-based airline and travel services group attributed an annual loss of $6 billion to the impact of Covid-19 related flight and travel restrictions throughout its entire 2020-21 financial year compared with a $456 million profit in the previous 12 months.

The airline’s losses came in at $5.5 billion against a $288 million profit a year earlier.

Dnata reported a total loss of $496 million, down from a $168 million profit in the previous year.

The reported total transaction value (TTV) of dnata travel services sold declined by 98% to AED 229 million ($62 million).

Excluding the impact of pandemic-related cancellation of bookings, travel division revenue declined by 89% to AED 294 million and the total transaction value dropped by 83% to AED 1.7 billion.

“Dnata’s travel division saw corporate and leisure travel demand dry up across markets,” the group said.

“Throughout an incredibly tough year with a fast-changing global travel environment, dnata’s travel division focussed on initiatives to support its customers and provide value.

“Across its travel brands, dnata helped its customers rebuild traveller trust by processing refunds and rebookings, and providing the latest travel information.”

Redundancies were implemented across all parts of the business for the first time in the group’s history.

The total workforce was cut by 31% to 75,145 employees, representing more than 160 different nationalities.

Chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said: “The Covid-19 pandemic continues to take a tremendous toll on human lives, communities, economies, and on the aviation and travel industry.

“In 2020-21, Emirates and dnata were hit hard by the drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions.

“Our top priorities throughout the year were: the health and wellbeing of our people and customers, preserving cash and controlling costs, and restoring our operations safely and sustainably.

“Emirates received a capital injection of AED 11.3 billion ($3.1 billion) from our ultimate shareholder, the government of Dubai, and dnata tapped on various industry support programmes and availed a total relief of nearly AED 800 million in 2020-21.

“These helped us sustain operations and retain the vast majority of our talent pool.

“Unfortunately, we still had to make the difficult decision to resize our workforce in line with reduced operational requirements.”

He added: “No one knows when the pandemic will be over, but we know recovery will be patchy.

“Economies and companies that entered pandemic times in a strong position, will be better placed to bounce back.

“Until 2020-21, Emirates and dnata have had a track record of growth and profitability, based on solid business models, steady investments in capability and infrastructure, a strong drive for innovation, and a deep talent pool led by a stable leadership team.

“These fundamental ingredients of our success remain unchanged. Together with Dubai’s undiminished ambitions to grow economic activity and build a city for the future, I am confident that Emirates and dnata will recover and be stronger than before.

“In the year ahead, we will continue to adopt an agile approach in responding to the dynamic marketplace.

“We aim to recover to our full operating capacity as quickly as possible to serve our customers, and to continue contributing to the rebuilding of economies and communities impacted by the pandemic.”

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