By David Owen
June 17 – Emirates Group, the Dubai airline which pumps significant sums into football via an impressive quiver of sponsorship agreements, has posted a heavy loss for the strongly Covid-19-impacted 12 months to end-March 2021 – its first ever annual deficit.
The carrier, whose results take into account the dnata ground handling and travel services business, reported an operating loss of around $4.6 billion for 2020-21, compared with a $1.9 billion profit a year earlier. The result came on revenue that nosedived nearly two-thirds from $28.3 billion in 2019-20 to just $9.7 billion.
In bluntly realistic comments, Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, warned that “our industry is not recovering as quickly as hoped”.
He went on: “At this time of writing, many countries are battling new variants and a third or fourth wave of Covid-19 infections, and international travel is still severely restricted in almost all markets.” Moreover, “no one knows when this pandemic will be over” and “recovery will be patchy”.
Sheikh Al Maktoum disclosed that the group’s cash balance was down 23% at some $5.4 billion. He said the business received capital injections totalling more than $3 billion from “our ultimate owner the Government of Dubai”. Even so, “as it became clear that recovery would take longer than initially projected, we made the difficult decision to resize our workforce by 31% in line with reduced operational requirements. This was the first time in our group’s history that we had to implement redundancies across all parts of the business.”
In sponsorship terms, the airline is perhaps best-known for its sponsorship of Arsenal, the North London club which plays at Emirates Stadium. According to the Emirates website, it has been official main sponsor of the Spanish giants Real Madrid since 2011. Other clubs listed on the website include Portugal’s Benfica, AC Milan of Italy, France’s Olympique Lyonnais and Olympiacos of Greece.
Its portfolio stretches well beyond football, taking in rugby, tennis, golf, cricket, cycling, motorsport, horse racing and others.
Emirates is, of course, not the only airline to have endured a tough year in 2020. It remains to be seen whether the harshness of the recent business climate will prompt the sector to rein in elements of its marketing spending.
Contact the writer of this story at email@example.com