The Emirates Group reported 2022-23 as its most profitable year ever on the back of strong demand across its businesses. Emirates achieved new record profits, a complete turnaround from its loss position last year.
Both Emirates and dnata saw significant revenue increases in 2022-23 as the group expanded its air transport and travel-related operations following the removal of nearly all pandemic-related restrictions around the world.
For the financial year ended March 31, 2023, the Emirates Group posted a record profit of AED10.9 billion ($3 billion) compared with an AED3.8 billion ($1 billion) loss for last year.
The group’s revenue was AED119.8 billion ($32.6 billion), an increase of 81 per cent over last year’s results. The group’s cash balance was AED42.5 billion ($11.6 billion), the highest ever reported, up 65 per cent from last year mainly due to strong demand across its core business divisions and markets, the group said.
Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates airline and Group, said: “We’re proud of our 2022-23 performance which is not only a full recovery, but also a record result. This achievement would not have been possible without HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai, whose leadership has been critical to our success today and through the years. The architect of Dubai’s progressive economic policies, HH Sheikh Mohammed is also the engine behind the Emirates Group’s trajectory. Without his drive and support, Emirates will be half the size of what we are today.”
He added: “I’m proud of the Emirates Group’s performance for 2022-23, and our contribution to the restoration of air transport and tourism across the markets we serve, including Dubai’s astounding 97 per cent year-on-year growth in international visitors for 2022.
“The group is the biggest player in the UAE’s aviation sector, which supports over 770,000 jobs and generates an estimated contribution to GDP of over $47 billion (AED172.5 billion). With our growth plans, and in line with the Dubai Economic Agenda D33, we expect to significantly increase our contribution to the UAE’s GDP over the next decade through direct and indirect employment, supply chain spending, tourism spend, and trade and commerce benefits from the movement of cargo.”
Commenting on the Group’s 2022-23 turnaround performance, Sheikh Ahmed said: “We had anticipated the strong return of travel, and as the last travel restrictions lifted and triggered a tide of demand, we were ready to expand our operations quickly and safely to serve our customers. Our ongoing investments in our brand, and in our products and services, helped drive customer preference and position us favourably in the market. As a result, we have delivered a record financial performance and cash balance for our financial year 2022-23. This reflects the strength of our proven business model, our careful forward planning, the hard work of all our employees, and our solid partnerships across the aviation and travel ecosystem.”
To support expanded operations and to bolster the group’s future capabilities, Emirates and dnata ramped up recruitment activity across the globe during the year. As a result, the group’s total workforce increased by 20 per cent to 102,379 employees, representing over 160 different nationalities.
In 2022-23, the group collectively invested AED7.2 billion ($2 billion) in new aircraft, facilities, equipment, companies, and the latest technologies to position the business for future growth.
The group’s commitments include: a massive multi-billion dollar aircraft cabin retrofit program; an order for five new 777 freighters; the building of a new pilot training centre; the opening of Bustanica, the world’s largest vertical farm in Dubai under a partnership with CropOne; new training aircraft for its cadets at Emirates Flight Training Academy; dnata’s acquisition of 30 per cent shares to gain full ownership of its ground handling operations in Brazil; and the building of a new advanced cargo facility in Erbil, Iraq.
The Emirates Group also continued to progress on its sustainability journey during the year. Notably, it signed up to the United Nations Global Compact, a voluntary initiative where Emirates and dnata will work towards making the UN Sustainable Development Goals (SDGs) and Principles part of their strategy, culture, and operations. The Group also signed the UAE Gender Balance Council’s pledge to increase female representation at mid-senior management positions to 30 per cent across the country by 2025.
Amongst its numerous environmental initiatives, a key highlight for Emirates was the successful conduct of a demonstration flight with 100 per cent sustainable aviation fuel (SAF) in one engine of a Boeing 777. This first-in-region initiative contributes to collective industry data and efforts to enable a future of 100 per cent SAF flying. dnata in 2022-23 pledged to invest $100 million (AED367 million) over two years, to improve environmental efficiency across its global business, supporting its goal to reduce its carbon footprint by 50 per cent by 2030.
Sheikh Ahmed said: “In 2022-23, we’ve not only brought back most of our operations but also grew our footprint and capabilities by investing in people, product, and new technologies – demonstrating our agility and ability. We continue to lay strong foundations for future success and join hands with partners to grow our business and to collaborate on innovative solutions for travel and aviation. As our business expands, so does our ability to make a positive impact on the communities we serve. We are steadfast in our commitment to deliver value to our customers and stakeholders while minimising our environmental impact.
“We go into 2023-24 with a strong positive outlook and expect the Group to remain profitable. We will work hard to hit our targets while keeping a close watch on inflation, high fuel prices, and political and economic uncertainty.”
Emirates performance
Emirates’ total passenger and cargo capacity increased by 32 per cent to 48.2 billion ATKMs in 2022-23, as the airline continued to reinstate passenger services across its network in line with the lifting of pandemic-related flight and travel restrictions.
In addition to launching services to Tel Aviv, Emirates relaunched flights to six destinations and increased operations to 62 cities across its network throughout the year to serve strong customer demand. By March 31, 2023, the Emirates network comprised 150 destinations across six continents, including 9 cities served by its freighter fleet only.
Emirates’ order book stands at 200 aircraft, including five additional Boeing 777-300ER freighter orders announced during 2022-23. The airline’s long-standing strategy of operating modern and efficient aircraft remains unchanged, a commitment which underpins its Fly Better brand promise as a young fleet is better for the environment, better for operations, and better for customers.
With significantly enhanced capacity deployment across most markets, Emirates’ total revenue for the financial year increased 81 per cent to AED107.4 billion ($29.3 billion). Currency fluctuations in some of the airline’s major markets, notably the euro, pound sterling, and devaluation of the Pakistani rupee, significantly impacted the airline’s profitability negatively by AED4.5 billion ($1.2 billion).
Total operating costs increased by 57 per cent from last financial year. Cost of ownership (depreciation and amortisation) and fuel cost were the two biggest cost components for the airline in 2022-23, followed by employee cost. Fuel accounted for 36 per cent of operating costs compared to 23 per cent in 2021-22. The airline’s fuel bill increased by 143 per cent of AED33.7 billion ($9.2 billion) compared to the previous year, due to a higher uplift of 49 per cent in line with capacity expansion and a higher average fuel price which was up by 48 per cent.
With the removal of pandemic-related travel restrictions globally, the airline substantially improved its financial results and reported a record profit of AED10.6 billion ($2.9 billion) after last year’s AED3.9 billion ($1.1 billion) loss, and an exceptional profit margin of 9.9 per cent, reflecting the best performance in the airline’s history.
Emirates carried 43.6 million passengers (up 123 per cent) in 2022-23, with seat capacity up by 78 per cent. The airline reports a Passenger Seat Factor of 79. 5 per cent, compared with last year’s passenger seat factor of 58.6 per cent; and a 7 per cent increase in passenger yield to 37.5 fils (10.2 US cents) per Revenue Passenger Kilometre (RPKM), due to a change in cabin and route mix, fares and currency.
Emirates continued to invest in delivering ever better customer experiences. During the year, it launched its full Premium Economy experience to hugely positive customer feedback, brought into service the first 6 of its newly retrofitted A380s with completely refreshed cabin interiors, and opened ‘Emirates World’ – a modern concept retail store which will gradually be introduced to other key markets. It also announced a US$ 350 million investment in new generation inflight entertainment systems for its A350 fleet.
Emirates SkyCargo
Emirates SkyCargo delivered a solid performance, contributing 16 per cent of the airline’s revenue despite a reduction in available capacity as aircraft that were temporarily converted into ‘mini freighters’ during the pandemic returned to full passenger service.
In 2022-23, Emirates’ cargo division reinforced its leadership in cool chain transport, building on the advanced expertise and infrastructure that made it the carrier of choice for the transport of temperature sensitive medicines during the pandemic, and other perishable items.
With steady air freight demand throughout the year, Emirates’ cargo division reported a solid revenue of AED17.2 billion ($4.7 billion). This was a 21 per cent decline over last year’s exceptional performance caused by the pandemic.
Hotels’ portfolio
Emirates’ hotels portfolio revenue over last year increased by 12 per cent to AED675 million ($184 million) reflecting the uptick in tourism traffic, particularly to Dubai.
Emirates has consistently demonstrated the ability and commitment to fulfil its contractual obligations. In addition to repaying aircraft related financing liabilities as they fall due, it successfully repaid AED3 billion ($817 million) more of the total AED17.5 billion ($4.8 billion) raised during the Covid-19 crisis. This assurance continues to strengthen the confidence of its financing partners in its business model and allowed Emirates to reprice AED4.5 billion ($1.2 billion) of debt during this financial year and further raise AED1.2 billion to finance the acquisition of two new B777 freighter aircraft through an Islamic finance lease at highly effective margins, it said.
Emirates closed the financial year with an exceptional level of cash assets of AED37.4 billion ($10.2 billion), 79 per cent higher compared to March 31, 2022.
dnata performance
Recovery from the pandemic was felt across almost all dnata businesses, and in 2022-23 dnata increased its profit by 201 per cent to AED331 million ($90 million).
With growing flight and travel activity across the world, dnata’s total revenue increased by 74 per cent to AED14.9 billion ($4.1 billion). dnata’s international businesses account for 72 per cent of its revenue, an increase of 10% from the previous year. Through the year, dnata worked closely with its customers through the challenges of labour shortages and rising inflation in its major markets such as UK, US, Europe and Australia.
