Emirates Announces its Annual Results

Emirates Group comprises of Emirates airline and dnata – which provides ticketing, catering and other airport related services. Today, Emirates Group released its annual results (year ended March 31, 2019).

I was not surprised by the results. Emirates airline continues to be profitable, although high fuel prices during mid-year has led to fall in profits.

Continue reading for detailed numbers and analysis for the airline business. Also note that Emirates results and metrics do not include flydubai.

Emirates Financial Results

Revenues grew 6% – suggests increase in passengers and cargo yields. This is because the passengers and cargo carried has remained flattish. Despite increase in revenue, EBITDAR declined slightly. This indicates that the fuel price increase could not be passed on completely to customers.

	2018/19	2017/18	% Change
Revenue ($ million)	26,659	25,139	6.0%
EBITDAR ($ million)	6,614	6,799	-2.7%
EBITDAR margin	24.8%	27.0%
Operating Profit ($ million)	721	1,113	-35.2%
Operating margin	2.7%	4.4%

Profitability has declined sharply though. Emirates has attributed the fall to high fuel prices, strong competitive pressure and unfavourable currency impact. While I am not sure about the last one, the first two are quite apparent. Fuel prices has increased about 22% compared to 2017/18. Further, in 2018/19 several Gulf carriers had added or increased capacity on routes operated by Emirates.

Emirates Operational Results

Emirates received 13 new aircraft during the year. This comprises of 7 A380s and 6 B777s. Capacity increased more than the passengers which led to lower utilization.

	2018/19	2017/18	% Change
No. of Passengers (million)	58.6	58.5	0.2%
Cargo (‘000 tonnes)	2,659	2,623	1.4%
Capacity (ASKM)	390,775	377,060	3.6%
Seat Factor	76.8%	77.5%
No. of aircraft	270	268	0.7%

Emirates Order Book

It is well known that Emirates will be moving from A380 to A350 and A330. I had covered this in my previous post – Emirates signals new regional strategy.

As of today, the pending deliveries for Emirates are

• 14 A380 (to be delivered from 2019 to 2021)
• 40 A330-900 (to be delivered from 2021 to 2024)
• 30 A350-900 (to be delivered from 2021 to 2024)
• 150 B777-X (to be delivered from 2020)

The last of B777-300ERs was received this year and no further orders remain. This is the same aircraft that was re-fitted with the new business and economy cabins.