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Emirates Airline faces $1.1 billion dollar loss, due to soaring fuel prices

Dubai’s Emirates Airline has announced its losses to $ 1.1 billion a year by March, as rising fuel costs threaten to stem the tide of travel demand.

The world’s largest long-haul carrier said revenue jumped by 91% to $ 16.1 billion, as travel shortages and air traffic were reduced. Emirates posted a loss of $ 5.5 billion last year.

“2021-22 was about recovery, after the most difficult year in the history of our Party,” Emirates Group Chairman and Chief Executive Officer Sheikh Ahmed bin Saeed Al Maktoum said in a statement on Friday.

“We expect the Party to return to profit by 2022-23, and we are working hard to achieve our goals, while looking at winds such as high fuel prices, inflation, COVID-19 differences, and political and economic uncertainty. ”

The airline has resumed flights to 140 destinations by the end of March, but rising fuel prices – up more than 50% so far this year – continue to challenge the epidemic-hit aviation sector. Emirates said its fuel debt is more than double to $ 3.8 billion as oil and jet fuel prices rise in recent areas.

“It is very difficult to determine where that price will stand, or how much it may drop,” Sheikh Ahmed in an interview on Tuesday when asked about the price of petrol. “That greatly affects the aviation industry,” he added, adding that geopolitics and the Russian invasion of Ukraine have had a significant impact on oil prices.

Emirates said fuel accounts for 23% of operating costs during the year, compared to 14% in 2020-21.

“The recent opening of key markets in Asia is key to Emirates’ recovery,” Alex Macheras, an independent airline analyst, “Challenges will continue with China’s closure, shipping concerns during the delay of the Boeing 777, and the global cost of living that will be most pronounced [in terms of] impacts on aircraft this winter.”

Road to IPO

The Emirates Group, which owns Emirates and its air service business Dnata, has recorded an annual loss of $ 1 billion, although Dnata is back in profits. The group’s revenue increased by 86% to $ 18.1 billion, and the group ended the year with a 30% improvement in its cash balance to $ 7 billion.

Sheikh Ahmed told that the group is now planning to pay the Dubai government a $ 4 billion emergency response to a plane crash during the epidemic.

“That was money well spent,” he said. “If things continue as they are now … we can pay for what the government injects into the company.”

It comes amid new speculation that Emirates or its affiliates could be contacted by the Dubai government to come forward, joining a list of businesses already set up for public service as part of the regional government’s pressure to take over their businesses.

“I am sure that in the future Emirates will be in the market and people will be able to buy shares,” Sheikh Ahmed said. “I do not call that point,” he added, ceasing to offer other programs.

Dubai Airports, the Emirates’ hometown, attracted 13.6 million passengers in the first quarter, according to new data released Thursday. Dubai airline chief executive Paul Griffiths that Dubai’s airline congestion could reach pre-epidemic levels by 2024, a year earlier than expected, which provided the Emirates with recovery.

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