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DUBAI: Emirates, one of the world’s largest long-distance airlines, said on Sunday that it will increase debt to help it overcome the coronavirus pandemic and may have to take tougher measures as it faces the most difficult months of his story.
The state airline, which suspended regular passenger flights in March due to the virus outbreak that has shattered global demand for travel, said a recovery in the trip was at least 18 months away.
He reported a 21 percent increase in earnings for his financial year that ended March 31, but said the pandemic had reached its performance in the fourth quarter and that it would take advantage of banks to increase debt in its first quarter to decrease. the impact on cash flows from the virus. .
The airline, which was promised financial help from its Dubai state owner, did not say how much it hoped to raise.
“The COVID-19 pandemic will have a major impact on our 2020-21 performance,” President Sheikh Ahmed bin Saeed said in a statement.
“We continue to take aggressive cost management measures and other steps necessary to safeguard our business, while planning to restart the business.”
In an internal email sent to staff Sunday and seen by Reuters, Sheikh Ahmed said the next few months would be the most difficult in the airline’s 35-year history.
“At some point, if our business situation does not improve, we will have to take tougher measures,” he said in the email.
Emirates did not immediately respond to an email request for comment in the internal email.
Emirates Group, which has the airline among its assets, said it will not pay an annual dividend to its shareholder, the Dubai state fund. Its cash assets were $ 7 billion, he said.
Dubai ruler Sheikh Mohammed bin Rashid Al-Maktoum said in the group’s annual report released on Sunday that he was confident that Emirates would emerge strong from the crisis and was a world leader in aviation.
Dubai said in March that it would inject funds into the airline. Emirates said in the annual report that Dubai would financially support the airline if necessary.
The airline made a profit of $ 299.5 million in the year through March 31, up from $ 237.17 million the year before, he said. However, he warned that the virus outbreak had reached its last trimester.
Revenue contracted 6.1 percent to $ 25.05 billion as the number of passengers carried fell 4.2 percent to $ 15.3 million.
In March, Emirates also temporarily cut staff salaries due to the coronavirus pandemic.
It is unclear when Emirates will resume normal flights. Rival Qatar Airways has said it will begin rebuilding its network starting this month, while Etihad Airways from Abu Dhabi plans to resume regular flights starting in June.
International connectivity is crucial to Emirates’ Gulf hub model, which made Dubai six years ago the world’s busiest international airport. It does not operate domestic flights and most of its passengers transit through its center.
Emirates sister company dnata experienced a 57 percent drop in earnings for the year through March 31 to $ 168.277 million, which the company attributed to investments in its airport and catering services divisions and weak demand in your travel business.
Dnata has fired some employees so that they may be eligible for unemployment plans, Sheikh Ahmed said in the internal email.
Dnata is reviewing its operations in Australia after it was excluded from a government labor protection scheme there due to its ownership of a foreign state.
Emirates Group’s earnings, which also includes dnata, fell 28 percent to $ 462.9 million. Revenue fell 4.8 percent to $ 28,318 billion.
Unfavorable currency exchange rates cost the Group $ 272.294 billion in profit, he said, while seeing a respite from cheaper oil prices.
