Emirates, the world's largest long-haul airline, swung to a record annual profit on strong travel demand as governments reopened international borders and lifted pandemic-related restrictions.
The airline posted a Dh10.6 billion ($2.9 billion) profit in the fiscal year that ended on March 31, compared with a Dh3.9 billion loss in the previous year, Emirates said on Thursday.
Revenue jumped 81 per cent to Dh107.4 billion, as the airline more than doubled the number of passengers carried, restored most of its global network and reinstated more passenger flights after the lifting of Covid-19 travel restrictions.
The airline carried 43.6 million passengers, up 123 per cent from last year, it said.
“We had anticipated the strong return of travel, and as the last travel restrictions lifted and triggered a tide of demand, we were ready to expand our operations quickly and safely to serve our customers,” Sheikh Ahmed bin Saeed, chairman and chief executive of Emirates airline and group, said.
“As a result, we have delivered a record financial performance and cash balance for our financial year 2022-23.
“This reflects the strength of our proven business model, our careful forward planning, the hard work of all our employees, and our solid partnerships across the aviation and travel ecosystem.”
The most profitable year at Emirates, the world's largest long-haul carrier, underscores the fast pace of its recovery from pandemic-induced losses as it quickly increased its operations to meet the surge in passenger demand.
The airline is currently flying its full fleet of Boeing 777s and 86 of its 116 Airbus A380 superjumbos. Emirates is likely to recover to its pre-pandemic network in the summer of next year after returning all its A380s to the skies, it said last week.
"The growth and success of Emirates has been at the heart of Dubai's rise as an aviation leader," said Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.
"The airline’s vast reach has also helped Dubai strengthen its global role as a bridge between markets and cultures."
Emirates' seat factor, a measure of how well an airline fills available seats, grew to 79.5 per cent, up from 58.6 per cent last year. Passenger yields climbed 7 per cent due to a change in cabin and route mix, fares and currency, it said.
Last year's profit margin of 9.9 per cent reflects its best performance on record, Emirates said.
Separately on Thursday, Emirates said it has earmarked $200 million to fund research and development projects focused on advanced fuel technologies that can reduce commercial aviation's environmental impact.
The airline will identify partnerships with major organisations working on these solutions and the funds will be disbursed over three years, it said.
Dividend and debt payments
Emirates Group, which includes global airport services company Dnata, swung to a record annual profit of Dh10.9 billion, from a Dh3.8 billion loss in the previous year.
"Over the next decade, as Dubai seeks to expand its economic footprint, the Emirates Group will play an instrumental part in adding more cities to its foreign trade network and opening new economic corridors," said Sheikh Mohammed.
Group revenue jumped 81 per cent year-on-year to Dh119.8 billion. Cash balance shot up 65 per cent on an annual basis to Dh42.5 billion, its highest ever, mainly due to strong demand across its core business divisions and markets, it said.
The group said it will pay its owner, the Investment Corporation of Dubai (ICD), a dividend of Dh4.5 billion for the fiscal year and will also prematurely repay Dh3 billion of debt raised during the Covid-19 pandemic, it said.
Emirates' total workforce increased by 20 per cent to 102,379 employees.
Air cargo and ground-handling performance
Dnata's cargo and ground handling, catering and retail, and travel services businesses recovered strongly from the pandemic, tripling annual profit to Dh331 million.
With growing flight and travel activity worldwide, dnata's total revenue increased 74 per cent to Dh14.9 billion. Its investments in the last fiscal year amounted to Dh467 million.
In terms of air freight, Emirates' cargo arm reported a 21 per cent decline in revenue of Dh17.2 billion, due to last year’s "exceptional performance" caused by the pandemic, it said.
Emirates SkyCargo contributed 16 per cent of the airline’s revenue despite a reduction in available capacity as aircraft that were temporarily converted into "mini freighters" during the pandemic returned to full passenger service, it said.
Looking ahead, Emirates Group expects to remain profitable in the financial year that began in April, while monitoring global economic conditions, Sheikh Ahmed said.
"We go into 2023-24 with a strong positive outlook and expect the group to remain profitable," he said.
"We will work hard to hit our targets while keeping a close watch on inflation, high fuel prices, and political and economic uncertainty."
The airline's outlook is aligned with similar growth predictions by travel and tourism stakeholders in the emirate.
Earlier this week, Dubai Airports chief executive Paul Griffiths told The National that the hub could exceed 2019 passenger traffic levels this year as a surge in travel demand defies stubbornly elevated ticket prices.
The airport could end the year with more than 90 million annual passengers, topping the 86.4 million handled in 2019, if it hits an average of 7.5 million monthly travellers through the remainder of 2023, he said.
Dubai recorded 14.3 million international visitors in 2022, inching closer to the 16.7 million tourists in 2019, according to DET statistics.