Emirates Group reports $5.1bn profit, Emirates airline earns $4.7bn

Emirates Group announces annual profit

Abdul Basit

The Emirates Group on May 13 reported a record profit for financial year 2023-24 at Dh18.7 billion, or $5.1 billion, up 71 per cent compared to AED 10.9 billion, or $3 billion, profit for last year. Emirates airline declared Dh17.2 billion profit for the year compared to Dh10.6 billion same period last year, showing an increase of 64 per cent.

The Group’s revenue was AED 137.3 billion, or $37.4 billion, an increase of 15% over last year’s results. The Group’s cash balance was AED 47.1 billion, or $12.8 billion, the highest ever reported, up 11% from last year. 

Combined Group profits for the last 2 years, at AED 29.6 billion, surpass pandemic losses of AED 25.9 billion during 2020-2022.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group said: “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.

“Huge credit is also due to the UAE’s visionary leaders, especially His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. It is thanks to their leadership and the nation’s progressive policies that the Emirates Group is able to flourish. 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.”

Sheikh Ahmed added: “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.”

Many major projects are already underway, including: a multibillion-dollar aircraft fleet and cabin renewal programme; new catering, cargo, and ground handling capabilities; advanced technologies to support the Group’s operations; expanded training and people development programmes; and initiatives to progress the Group’s sustainability agenda.

In 2023-24, the Group collectively invested AED 8.8 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% 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.

The Group took significant strides in its sustainability journey during 2023-24, putting into action numerous initiatives focussed on the environment, its people, customers, and communities.

Environmental topics were high on the agenda during the year, as the UAE hosted the world’s biggest conference for climate action, COP28, in Dubai.

In 2023-24, Emirates signed new supply agreements to uplift sustainable aviation fuel (SAF) at its Dubai hub for the very first time, and also in Amsterdam and Singapore. The airline operated the first A380 demonstration flight using 100% SAF in one engine, collecting data to support industry efforts to enable a future of 100% SAF flying.

Recognising that airlines today have the limited viable solutions to meaningfully reduce carbon emissions, Emirates established a US$ 200 million fund to support R&D projects that focus on reducing the impact of fossil fuels in commercial aviation. It also became a founding entity of Air-CRAFT, a UAE-based research consortium for renewable and advanced aviation fuels; and joined The Solent Cluster, a UK initiative focused on producing low-carbon fuels for a variety of sectors, including aviation.

dnata continued to invest and induct more electric and hybrid vehicles to its global fleet of ground support equipment (GSE), adding new baggage tractors, cargo loaders, and pushback tractors to its USA operations. It also converted and refurbished diesel-powered GSEs in Italy to run on Hydrogenated Vegetable Oil and electric power. dnata’s UAE businesses including dnata logistics, Arabian Adventures, Alpha Flight Services and City Sightseeing Worldwide, transitioned to biofuel for its landside fleet of vehicles.

During the year, dnata became the first combined air services provider to receive the International Air Transport Association’s environmental management (IEnvA) certification for its commitment to sustainability across its UAE businesses; and Emirates achieved IEnvA Stage One and the IEnvA Illegal Wildlife Trade module certifications, for its efforts in environmental stewardship and anti-wildlife trafficking.

Emirates performance

Emirates’ total passenger and cargo capacity increased by 20% 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.

With increased capacity deployment and strong demand across markets, Emirates’ total revenue for the financial year increased 13% to AED 121.2 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 AED 2.0 billion (US$ 0.6 billion).

The airline saw an operating cash flow of AED 37.6 billion (US$ 10.3 billion) in 2023-24, underpinning its strong commercial results and enabling the airline to grow the business going forward.

dnata performance

dnata increased its profit by 330% to AED 1.4 billion (US$ 387 million) in 2023-24, reporting solid results across its business divisions.

dnata’s total revenue increased by 29% to hit a new record of AED 19.2 billion (US$ 5.2 billion), driven by increased flight and travel activity across the world. dnata’s international businesses account for 75% of its revenue, an increase of 3%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 AED 464 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% to AED 17.8 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 AED 958 million to AED 4.2 billion (US$ 1.1 billion), primarily due to AED 2 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 AED 1.9 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 AED 8.8 billion (US$ 2.4 billion).

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

During 2023-24, dnata continued to invest in infrastructure and the latest technologies to respond to customer needs.  It integrated autonomous drones into its UAE operations, implemented AI-powered solutions in Singapore, and continued to roll out One Cargo, its advanced cargo management system globally. dnata also announced it will expand operations into Rome Fiumicino Airport where its majority-owned subsidiary, Airport Handling, won a seven-year ground handling license. To support this new operation, dnata will invest €20 million in new and advanced ground equipment.

dnata’s Catering & Retail business accounted for AED 6.5 billion (US$ 1.8 billion) of dnata’s revenue, up by 35%. The inflight catering business uplifted 123.0 million meals to airline customers, a 10% increase from last year, as its airline customers across the world restored and expanded their flight operations. – abdulbasit@theuaenews.com