Emirates’ cargo volume dips by 8 percent due to trade tensions

November 8, 2019: During the first six months of the financial year 2019-20, Emirates Group’s volume of cargo uplifted at 1.2 million tonnes decreased by 8 percent while yield declined by 3 percent. This reflects the tough business environment for air freight in the context of global trade tensions and unrest in some key cargo markets.

The group recorded an 8 percent profit for the first six months of the financial year 2019-20, compared to the same period last year. The group reported a half-year net profit of AED 1.2 billion ($320 million). The profit improvement was primarily due to the decline in fuel prices of 9 percent compared to the same period last year; however, the gain from lower fuel costs was partially offset by negative currency movements.

Revenue stood at AED 53.3 billion ($14.5 billion), down 2 percent from AED 54.4 billion ($14.8 billion) during the same period last year. Overall capacity declined by 7 percent to 29.7 billion available tonne kilometres (ATKs) mainly due to the Dubai International Airport (DXB) runway closure and reduction in the fleet during this 45-day period. Capacity measured in available seat kilometres (ASKs), shrunk by 5 percent, whilst passenger traffic carried measured in revenue passenger kilometres (RPKs) was down by 2 percent with average passenger seat factor rising to 81.1 percent, compared with last year’s 78.8 percent. Even unfavourable currency movements in Europe, Australia, South Africa, India, and Pakistan were another reason for the decline.

During the first six months of 2019-20, Emirates received 3 A380s, with 3 more new aircraft scheduled to be delivered before the end of the 2019-20 financial year. It also retired 6 older aircraft from its fleet with a further 2 to be returned by March 31, 2020. It added two new passenger routes: Dubai-Bangkok-Phnom Penh, and Dubai-Porto (Portugal). As of September 30, Emirates’ global network spanned 158 destinations in 84 countries. Its fleet stood at 267 aircraft including freighters.

Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group stated, "The Emirates group delivered a steady and positive performance in the first half of 2019-20, by adapting our strategies to navigate the tough trading conditions and social-political uncertainty in many markets around the world. Both Emirates and dnata worked hard to minimise the impact of the planned runway renovations at DXB on our business and on our customers. We also kept a tight rein on controllable costs and continued to drive efficiency improvement, while ensuring that our resources were deployed nimbly to capitalise on areas of opportunity.”

“The global outlook is difficult to predict, but we expect the airline and travel industry to continue facing headwinds over the next six months with stiff competition adding downward pressure on margins. As a group, we remain focussed on developing our business, and we will continue to invest in new capabilities that empower our people, and enable us to offer even better products, services, and experiences for our customers,” he added.

Emirates also further developed its partnership with flydubai. Both airlines continued to leverage their complementary networks to optimise flight schedules and offer new city-pair connections through Dubai, as well as open new routes including Naples (Italy) and Tashkent (Uzbekistan) in the first half of 2019-20.

In the first half of 2019-20, dnata’s international operations accounted for over 72 percent of its revenue, compared to 68 percent during the same period last year. Its revenue, including other operating income, was AED 7.4 billion ($2.0 billion), a 5 percent increase compared to AED 7 billion ($1.9 billion) last year. This performance was underpinned by robust business growth and further global expansion, particularly in its catering business.

dnata’s airport operations remain the largest contributor to revenue with AED 3.6 billion ($983 million), a slight increase as compared to the same period last year. Across its operations, the number of aircraft handled by dnata remained steady with 351,194, and it handled 1.5 million tonnes of cargo, down 6 percent.

Organic growth across dnata’s international ground handling business with key contract wins across US locations, and improved performance in markets such as Italy, Singapore, Switzerland and Iraq, helped drive dnata’s revenue and compensate for the negative currency impact of approximately AED 86 million. In the UAE, dnata acquired full ownership of freight forwarding company, Dubai Express.

The group’s cash position on September 30, 2019 stood at AED 23 billion ($6.3 billion), compared to AED 22.2 billion ($6.0 billion) as of March 31, 2019.