Emirates Reports 71% Jump in Profits to $5.1 billion

Emirates Group that includes the world’s largest international passenger carrier Emirates Airline and its ground handling and ticketing arm Dubai National Air Travel Agency (Dnata) reported a 71 percent jump in net profits exceeding Dh18.7 billion (US$5.1 billion) in 2023-24 financial year ending March 31 2024, compared to Dh11 billion (US$3 billion) recorded the previous year. This is a new profit record for Emirates Group.

Group revenue increased 15 percent to Dh137.3 billion (US$7.4 billion) compared to Dh119.8bn (US$32.6bn) in 2022-23 financial year, driven by strong customer demand across its businesses. At the end of the financial year, Emirates Group had a strong cash balance of Dh47.1 billion (US$12.4 billion).

The Group declared a Dh4 billion (US$1.1 billion dividend to its shareholder – the Government of Dubai through Investment Corporation of Dubai (ICD). Combined Emirates Group profits for the last two years, at Dh29.6 billion, surpass the COVID-19 pandemic losses of Dh25.9 billion during 2020-2022.

“The Emirates Group has once again raised the bar to deliver a new record performance. Throughout the year, we saw high demand for air transport and travel related services around the world, and because we were able to move quickly to deliver what customers want, we achieved tremendous results. We are reaping the benefit of years of non-stop investments in our products and services, in building strong partnerships, and in the capabilities of our talented people,” Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group, said.

“Both Emirates and Dnata have forged successful business models leveraging Dubai’s unique advantages, in turn generating enormous value for Dubai and the communities they serve around the world. The Group’s excellent financial standing today places us in a strong position for future growth and success. It enables us to invest to deliver even better products, services, and more value to our customers and stakeholders.”

In 2023-24, the Group collectively invested Dh8.8 billion (US$2.4 billion) in new aircraft, facilities, equipment, companies, and the latest technologies to support its growth plans. The Group’s total workforce grew by 10 percent to 112,406 employees, its largest size ever, as Emirates and Dnata continued recruitment activity around the world to support its expanding operations and bolster its future capabilities.

Emirates Group results reflect a rebound in passenger traffic worldwide. Global passenger traffic in 2024 is predicted to surpass the 2019 level for the first time since COVID-19, reaching 9.7 billion passengers or 106 percent of the 2019 level (12% YoY growth rate), according to a report by ACI World

“The growth rate is expected to gradually decelerate in succeeding years, as more markets recover from the effects of COVID-19.”

Middle Eastern airlines saw a 10.8 percent year-on-year increase in demand. Capacity increased 13.9 percent year-on-year and the load factor fell -2.1ppt to 77.5 percent compared to March 2023, said the International Air Travel Association (IATA).

Willie Walsh, IATA’s Director General, said recently, “Demand for travel is strong. And there is every indication that this should continue into the peak Northern Summer travel season. It is critical that we have the capacity to meet this demand and ensure a hassle-free travel experience for passengers. That means making urgent progress to resolve supply chain issues and for airports and air traffic management to be fully staffed and operating at maximum efficiency.

“While airlines are prepared for customer care and assistance when operational issues arise, they are fed-up of bearing the cost when delays and cancellations are the result of poor preparation in other parts of the value chain.”

Emirates Airline

With increased capacity deployment and strong demand across markets, Emirates Airline’s total revenue for the financial year increased 13 percent to Dh121.2 billion (US$33.0 billion). Currency fluctuations and devaluations in some of the airline’s major markets, notably the Pakistani Rupee, Egyptian Pound, and Indian Rupee, negatively impacted the airline’s profitability by Dh2.0 billion (US$0.6 billion).

Total operating costs increased by 8 percent from last financial year. Cost of ownership (depreciation and amortisation) and fuel cost were the airline’s two biggest cost components in 2023-24, followed by employee cost. Fuel accounted for 34 percent of operating costs compared to 36 percent in 2022-23. The airline’s fuel bill increased slightly to Dh34.2 billion (US$9.3 billion) compared to Dh33.7 billion (US$9.2 billion) the previous year, with a higher uplift of 24 percent due to increased flying being balanced by a lower average fuel price (down 18%) including hedging gains.

Driven by the voracious appetite for travel across customer segments, the strength of its global network, and the appeal of its products, the airline hit a new record profit of Dh17.2 billion (US$4.7 billion) exceeding last year’s Dh10.6 billion (US$2.9 billion) result, with an exceptional profit margin of 14.2 percent, marking it the best performance in the airline’s history.

Emirates carried 51.9 million passengers (up 19%) in 2023-24, with seat capacity up by 21 percent. The airline reports a Passenger Seat Factor of 79.9 percent, rising from 79.5 percent last year. Passenger yield declined 2 percent to 36.6 fils (10.0 US cents) per Revenue Passenger Kilometre (RPKM), due to a change in cabin and route mix, fares and currency.

The airline saw an operating cash flow of Dh37.6 billion (US$10.3 billion) in 2023-24, underpinning its strong commercial results and enabling the airline to grow the business going forward.

Emirates’ total passenger and cargo capacity increased by 20 percent to 57.7 billion ATKMs in 2023-24, recovering to near pre-pandemic levels. Providing customers with more connection options, Emirates restarted services to Tokyo Haneda, added capacity to 29 destinations, and launched new daily flights to Montréal, Canada. Emirates also inked codeshare and interline agreements with 11 new airline partners, further extending its network’s reach. By 31 March 2024, the Emirates network comprised 151 destinations across six continents, including 10 cities served by its freighter fleet only.

Emirates brought its flagship A380 and popular Premium Economy product to even more cities this year, as 16 more aircraft rolled out of its US$2 billion cabin retrofit programme, fully refurbished with the airline’s latest signature products. As of 31 March 2024, the Emirates A380 served 49 destinations, and customers could enjoy Emirates’ Premium Economy experience to and from 15 cities around the world.

Total fleet count at the end of March was 260 units, with an average fleet age of 10.1 years.

Emirates’ order book stands at 310 aircraft, after it announced orders worth US$58 billion combined, for 110 additional units of Boeing 777s, 787s, and Airbus A350s at the 2023 Dubai Airshow. These new generation widebody aircraft will replace older jets and support fleet growth, aligning with the airline’s long-standing commitment to fly modern aircraft that are efficient to operate, and able to offer customers the latest inflight comforts and experiences.

Emirates SkyCargo reaffirmed its position in global air logistics and trade, carrying 2.2 million tonnes of goods around the world in 2023-24, up 18 percent from the previous year. Despite continued challenges in global logistics, the cargo division reported a solid revenue of Dh13.6 billion (US$3.7 billion), contributing 11 percent to the airline’s total revenue. Cargo yield per Freight Tonne Kilometre (FTKM) declined by 32 percent, returning to pre-pandemic marketplace levels.

At the end of 2023-24, Emirates’ SkyCargo’s total freighter fleet stood at 11 Boeing 777Fs. The cargo division expects delivery of its 5 additional Boeing 777Fs on order from mid-2024.

Emirates Flight Catering hit record revenues of Dh970 million (US$264 million) from its external customers, driven by traffic growth at Dubai’s airports. It supplied 76.9 million meals to airline customers, 19 percent more than the previous year, and saw rising demand for its other ancillary businesses including at Linencraft, its laundry facility which primarily serves airline and hospitality clients.

MMI/ELR revenue surged 18 percent to Dh2.9 billion (US$796 million), as it expanded UAE operations to meet growing wholesale and retail demand driven by the booming tourism sector. ELR recorded record sales growth globally, with strong contributions from its key markets of the UAE, the US and Australia.

Emirates’ hotels portfolio revenue over last year decreased by 2 percent to Dh660 million (US$180 million), reflecting the temporary closure of its Wolgan Valley resort in Australia.

With another year of strong performance, Emirates continued to meet all its regular aircraft-related payment obligations and repaid an additional Dh2.2 billion (US$596 million) from the Dh17.5 billion (US$4.8 billion) borrowed during the COVID-19 crisis. This substantially reduced its overall outstanding debt profile and places the airline on a strong foundation for financing for its future growth and the new fleet acquisition programme.

Emirates closed the financial year with its highest-ever level of cash assets at Dh42.9 billion (US$11.7 billion), 15 percent higher compared to 31 March 2023.

Sheikh Ahmed said: “We enter our 2024-25 financial year on strong foundations for continued growth. Emirates will receive delivery of 10 new A350 aircraft in 2024-25, adding to our fleet mix and supporting the next phase of its network growth. Dnata will continue to leverage synergies and scale across its business divisions to grow its footprint and capabilities. In tandem, we are investing resources to minimise our environmental impact, develop our people, look after our customers and the communities we serve.

“The business outlook is positive, and we expect customer demand for air transport and travel to remain strong in the coming months. As always, we will keep a close watch on costs and external factors such as oil prices, currency fluctuations, and volatile environments caused by socio-political changes. Our business model has been tested before, and I am confident in our resilience and ability to respond quickly to opportunities and challenges.

“Looking further ahead, the Dubai government has announced plans to start the next phase of expansion at Al Maktoum International Airport, which will eventually be the new hub for Emirates and dnata’s operations. This Dh128 billion (US$35 billion) investment will significantly expand and enhance Dubai’s aviation and logistics infrastructure, supporting the city’s growth, and Emirates’ and Dnata’s growth.

Dnata

Emirates Group’s ground handling and ticketing arm, Dubai National Air Travel Agency (Dnata) increased its profit by 330 percent to Dh1.4 billion (US$387 million) in 2023-24, reporting solid results across its business divisions.

Dnata’s total revenue increased by 29 percent to hit a new record of Dh19.2 billion (US$5.2 billion), driven by increased flight and travel activity across the world. Dnata’s international businesses account for 75 percent of its revenue, an increase of 3 percentage pts from the previous year. Through the year, Dnata won new customer contracts across its divisions, and worked closely with its customers to support increased flight activity and travel demand especially in its major markets: Australia, Europe, the UAE, UK, and US.

Laying the foundations for future growth, Dnata’s investments in 2023-24 amounted to Dh464 million (US$126 million). Significant investments during the year included: new electric and hybrid ground support equipment for its airport operations as part of its environmental strategy, and the expansion of marhaba operations in the Philippines, Italy, and the UAE.

In 2023-24, Dnata’s operating costs increased by 22 percent to Dh17.8 billion (US$4.8 billion), in line with expanded operations in its Airport Operations, Catering & Retail, and Travel divisions, as well as continued inflationary pressure across all markets mainly for labour and food supply.

Dnata’s cash balance declined by Dh958 million to Dh4.2 billion (US$1.1 billion), primarily due to Dh2 billion (US$545 million) in dividend payments to its owner, ICD, plus the funding of investments and debt repayments. The business saw a positive operating cash flow of Dh1.9 billion (US$507 million) in 2023-24, a reflection of the substantial improvements in revenue.

Revenue from dnata’s Airport Operations, including ground and cargo handling increased to Dh8.8 billion (US$2.4 billion).

The number of aircraft handled by Dnata globally grew by 9 percent to 778,026; and cargo handled increased by 5 percent to 2.9 million tonnes, reflecting new contracts won, and increased flight activity by dnata’s airline customers across markets.

Dnata’s Catering & Retail business accounted for Dh6.5 billion (US$1.8 billion) of Dnata’s revenue, up by 35 percent. The inflight catering business uplifted 123.0 million meals to airline customers, a 10 percent increase from last year, as its airline customers across the world restored and expanded their flight operations.

Revenue from Dnata’s Travel Services division grew by 48 percent to Dh3.5 billion (US$951 million), with strong contributions from Destination Asia, its destination management business in Asia, and Imagine Cruising, a cruise holidays business in which Dnata has acquired a majority stake. Total transaction value (TTV) of travel services sold increased by 27 percent to Dh8.9 billion (US$2.4 billion), reflecting the division’s ability to deliver relevant products to meet strong demand globally.