Emirates posts $3.8 billion loss after virus sunk air travel

Emirates Group, owner of the world’s largest long-haul carrier, slumped to its first loss in more than 30 years after the coronavirus pandemic reduced demand for air travel to a trickle.

The 14.1 billion dirham ($3.8 billion) loss for the state-owned company came alongside a 24% reduction in headcount over the six months through September, Emirates said in a statement on Thursday. Revenue fell 74% as an increase in cargo traffic wasn’t enough to offset the decline of commercial flights.

“We began our current financial year amid a global lockdown when air-passenger traffic was at a literal standstill,” said Chairman Sheikh Ahmed Bin Saeed Al Maktoum. “We expect a steep recovery in travel demand once a Covid-19 vaccine is available, and we are readying ourselves to serve that rebound.”

Emirates Airline was particularly hard hit by the pandemic because its business model is built around the biggest category of jets—Airbus SE A380s and Boeing Co. 777s—carrying passengers between all corners of the globe. Long-haul travel is widely expected by the industry to be the slowest to recover from the crisis as passengers shy away from lengthy journeys and virus hotspots.

The Dubai-based carrier, which started resuming regular passenger flights on May 21 after suspending most trips for almost two months, has recovered about a sixth of its pre-pandemic network.

The Emirates Group, which also includes ground-handling firm Dnata, cut about 26,000 jobs over the six-month period, bringing the total to just over 81,000. This was to adapt to “expected capacity and business activities in the foreseeable future,” the company said.

While the group’s cash position fell to 20.7 billion dirhams from 25.6 billion dirhams six months earlier, Emirates has recieved support from Dubai’s government, which has put about 7.3 billion dirhams into the company since March.