Emirates Reports Record $2.9 Billion Profit

Emirates Reports Record $2.9 Billion Profit

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Emirates Airline has just revealed its results for the 2022-2023 financial year. The news is great across the board, as the airline has reported its highest ever revenue, and biggest ever profit (some of which will be going to employees).

It’s a reflection of how quickly international travel has recovered. Just two years ago, Emirates reported its biggest ever loss, of $5.5 billion, and many wondered if international travel would ever be the same. Now we’re seeing demand roaring back like never before.

The details of Emirates’ financial results

Emirates Group has reported a $3.0 billion profit, while Emirates Airline reported a $2.9 billion profit (compared to a $1.1 billion loss the previous year), representing a 9.9% profit margin. Emirates Group also includes ground handling company dnata, though I’ll be focusing specifically on the carrier’s results.

To look at some of the key figures of Emirates’ performance compared to the previous year:

  • Revenue increased by 81%, to $29.3 billion
  • Passenger and cargo capacity increased by 32%, to 48.2 billion ATKMs
  • The airline carried 43.6 million passengers, up 123%
  • The load factor was 79.5%, compared to a load factor of 58.6% the previous year
  • Passenger yield was up 7%, to 10.2 cents per revenue passenger kilometer, due to a change in cabin and route mix, fares and currency
  • Operating costs increased by 74% (to $4.0 billion), with the carrier’s fuel bill increasing by 142% (to $9.2 billion)
  • Emirates’ fleet added two new 777 freighter aircraft; otherwise Emirates only phased out four older aircraft, so the airline currently has 260 planes that are an average of just over nine years old
  • Emirates Group’s total workforce was increased by 21%, to 102,379 employees

With Emirates’ return to profitability, the airline is ending the financial year with its highest ever cash balance of $11.6 billion. Furthermore, Emirates Group has declared a dividend of $1.2 billion to its owner, Investment Corporation of Dubai. Furthermore, the airline has repaid $817 million in debt raised during the pandemic.

While all of the above is good news, there is one interesting negative as well. Emirates estimates that currency fluctuation in some of the carrier’s key markets negatively impacted the carrier’s profitability by $1.2 billion. This includes fluctuations with the Euro, Pound Sterling, and Pakistani Rupee. Admittedly you’re always going to have some currency fluctuation somewhere, so if it wasn’t these currencies, it would’ve been another currency.

Emirates didn’t take delivery of any new passenger jets this year

Are Gulf carrier financial results even real?

When I write about the financial performance of the Gulf carriers, there are always questions about whether this is all just imaginary math, given that the Gulf carriers are state owned. After all, going back several years, US airlines spent millions of dollars campaigning to convince us that these are all heavily subsidized airlines that light money on fire (they’ve since changed their tune).

Yes, these results are accurate, and they’re independently audited per international financial reporting standards. However, there’s no denying that the math on some things works differently for an airline like Emirates than many other airlines:

  • Emirates has had easier access to attractive financing on account of being government owned, which has allowed the airline to become what it is
  • Emirates largely has lower operating costs than other airlines, given that the airline essentially has the same owner as the airport, ground handlers, catering company, etc.

I do think Emirates is “legitimately” profitable. The problem with the A380 for most airlines is that they haven’t been able to scale their operations in a way that works. Emirates has been able to scale its route network unlike any other airline. The A380 was quite literally created for Emirates’ business model, it’s just a shame that other airlines couldn’t make it work in the same way. One has to wonder what Emirates will look like starting in the mid-2030s, when the A380 is no longer in service.

Emirates has had more success with the A380 than any other airline

Bottom line

Emirates has reported a record $2.9 billion profit for the past financial year, after losing billions of dollars during the pandemic (like virtually all other major global airlines). It’s great to see Emirates continuing to succeed with its business model. The airline has scaled operations with the A380 in a way that no other airline has, and that’s a key part to the carrier’s success.

What do you make of Emirates’ 2022-2023 financial results?

Conversations (38)
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  1. Duck Ling Guest

    Is it just me being hungover on a Saturday morning or was there a news story on the 24 Week Bonus for employees that has now been removed?

    1. Ben Schlappig OMAAT

      @ Duck Ling -- See here:
      https://onemileatatime.com/news/emirates-employee-bonus/

  2. Omar Guest

    Not surprising given how insane their prices have gotten in many markets.

  3. Kyle H Guest

    Is there any chance the fuel surcharges on awards can start to reduce now? The fuel prices have stabilized. Where I live, the high when these surcharges were raising was $6 USD/gal now I'm regularly seeing $4.30 USD/Gal. I don't care if the points get devalued further, but the fuel surcharges are almost the cash price of premium economy now. I'd rather spend that cash on buying points in the first place.

    1. glenn t Diamond

      The expression 'Fuel surcharge' is only trotted out when fuel costs are in fact high. Other times it becomes ' carrier-imposed surcharge' or the like.
      Unfortunately, this charge, whatever they may call it, is baked into their fare structure and will never go away.

  4. ECR12 Guest

    I get that the Pakistani Rupee is in freefall right now, but How big could their exposure be in the context of that massive global route network?

  5. Jeonghoon Guest

    On their way to pull a Korean Air, I guess?

  6. Patti Guest

    Color me not surprised.

    The flight I took only a short time ago doubled this year from $4k to almost $9k.

    Broke my heart because they are our preferred international carrier but they've priced me out for a while.

  7. Tim Dunn Diamond

    Very accurate assessment of Emirates, Ben.
    The only caveat about EK's future to add is that they are effectively now the international carrier of India. As many more new routes from India are added, EK's future will be more and more challenged esp. without the A380

    1. Sean M. Diamond

      Dubai has maxed out its bilateral allocations to India. There is no new route or additional capacity on existing routes left to add.

    2. ConcordeBoy Diamond

      @Sean,

      How long do you think it'll be before there's a renegotiation? Particularly as the new AI starts receiving its massive order, and can theoretically undercut Dubai with nonstops to longhauls?

      Is there ever the possibility of open-skies?

    3. Sean M. Diamond

      There is unlikely to be a renegotiation with the current setup where Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah each have separate legacy BASAs. India has offered to renegotiate on the basis of a single unified UAE BASA, which the UAE airlines have opposed.

      Things may change if one of the Indian carriers gets into a deeper partnership with one of the UAE carriers (like when Etihad bought into Jet Airways - followed by...

      There is unlikely to be a renegotiation with the current setup where Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah each have separate legacy BASAs. India has offered to renegotiate on the basis of a single unified UAE BASA, which the UAE airlines have opposed.

      Things may change if one of the Indian carriers gets into a deeper partnership with one of the UAE carriers (like when Etihad bought into Jet Airways - followed by a huge increase of Abu Dhabi traffic rights), but otherwise they will need to decide what kind of traffic mix to pursue (O&D versus 6th freedom) with the traffic rights available.

  8. Brodie Guest

    With those insane fuel charges how could you not?

  9. vlcnc Guest

    They started making profit, and stopping innovating and providing industry leading customer experience and service. Everything is cut, and in economy the food is now dire. I haven't flown with them after their racist staff yelled at me a south asian person a couple of years ago when I asked what I should do after very delayed landing in Dubai as my connection was very short while they were nice and kindly helping white passengers....

    They started making profit, and stopping innovating and providing industry leading customer experience and service. Everything is cut, and in economy the food is now dire. I haven't flown with them after their racist staff yelled at me a south asian person a couple of years ago when I asked what I should do after very delayed landing in Dubai as my connection was very short while they were nice and kindly helping white passengers. Awful airline that has got too big and forgotten those who supported them all these years. Won't be ever be returning as a customer and I spent all those miles they gave as an apology on easyJet in Europe which to be honest given their rubbish ff programme is probably the way to go anyway.

    1. KinkyKuwaiti Guest

      Are you sure you weren't just being an arse to the crew and maybe that's why they weren't particularly interested in helping you? Your post seems to hint at being over emotional and difficult to interact with. In my experience the crew have never been racist toward passengers. They live in Dubai after all and it's a very well mixed city where your "white" population is drastically smaller than the "south asian" population by a LONG shot

    2. vlcnc Guest

      Yes I am sure thanks. It wasn't the crew, it was the ground staff who had been instructed to meet our flight to assist passengers with connections. Your post seems to hint at someone patronising and un-empathetic. Also this is my experience not yours. And given the racial hierarchy in that cursed city and also yours "KinkyKuwaiti" where white people are put on a pedestal I really wouldn't be lecturing or questioning others on their experiences of racism.

    3. Sosongblue Guest

      Funny considering 80-90% of the EK DXB ground staff is south asian, btw how do you know the food in economy is now “dire” when you admit you haven’t flown them in years? It sounds like you are likely to be the one exaggerating and craving attention at every turn!

    4. vlcnc Guest

      The ground staff weren't South Asian in my case - next lol. And the food was dire at the last point I flew with them, I don't understand what's difficult to understand - it's unlikely to have improved given EK are generally cost cutting.

    5. Sosongblue Guest

      I guess you will never know since you have obviously moved onto non racist airlines with better food options….next lol!

    6. vlcnc Guest

      Glad you think racism is so funny. Really showing yourself so well here. Keep going.

    7. Sosongblue Guest

      Not laughing at racism, just laughing at you…. It demeans the term when you toss it around at everything! Have you found a non racist airline yet that serves you better food?

    8. vlcnc Guest

      I experienced racism. Just because its from an airline you like doesn't mean I am "tossing it around at everything" as you say. And yes I fly all the time, and I have not been treated like I was by Emirates, and yes there's plenty with better food.

    9. Sosongblue Guest

      Vlcnc,

      Again, what is the airline you recommend…. Qatar? BA? BTW you are implying something that is untrue, I can’t stand Emirates, I just take your claims of racism with some skepticism that’s all!

  10. Sam G Guest

    I'm not surprised, whenever I'm shopping fares Emirates are not the cheapest and on routes like UK-Dubai I'd say they're often double what they were pre-COVID. Yet their flights are packed as ever. well done to them!

  11. Levi Diamond

    Being an airline which didn't scrap capacity during the pandemic (and having your primary competitor on most connecting routes ground a lot of planes) helps when demand rebounds.

    1. Nelson Diamond

      @ Levi;
      They didn't scrap capacity just because money is not an issue in that region.

    2. Dan77W Guest

      @ Levi,

      They didn’t scrap capacity because that City is kept alive via air cargo in the belly holds of all of those widebodies. How do you think a head of lettuce gets to Dubai? They were running passenger 777s around empty in the cabin throughout the pandemic, just to haul freight down below….. by schedule freight tonnage kilometers EK is the 4th largest scheduled cargo airline in the world!

  12. LEo Diamond

    Thanks to the American Sanction against Russia, that's what I assume where the most profits are made.

  13. Sean M. Diamond

    Emirates staff are also receiving 24-weeks profit sharing (so basically a 50% salary bonus).

    Let's see what ALPA at various US carriers has to say about that!

    1. Dan77W Guest

      Ha once I left the EK cockpit to come back to the States I worked half as much for 50% more take home pay, manageable schedules and not the constant bone-breaking fatigue. They are more than welcome to their bonus….they deserve it and so much more, but I’ll take what I’ve got over here in spades! Working at Emirates is nothing to be envious of for the average US normal narrow body major airline pilot!

  14. LEo Diamond

    PwC is their auditor, the same group that audited China Evergrande Group and gave green light to that group from 2009-2021, I doubt their accounting practice now.

  15. Nelson Diamond

    Ben, regarding your "issue" with Emirates and not having A380's anymore in service by mid 2030 I would not been surprised a restart of production line in the coming years. EK don't need that much to convince anyone. After all EK was the one who keeped the A380 production line open for that "long."

    1. Lukas Diamond

      This brings up a great point. Is it at all, in any shape or form, realistic to bring A380 back after being declared finished? Ben?

    2. ConcordeBoy Diamond

      LOL, *what* production line?

      Those facilities are now used to create more A32x, whose demand won't be falling any time soon, certainly not sufficiently to justify stopping THEIR production there in favor of a few dozen widebodies to a single carrier.

      This is to say nothing of the outsourced producers for parts unique to the A380, who ceased production, wrote off excesses, and moved on two years ago.

      If you're holding your breath for that,...

      LOL, *what* production line?

      Those facilities are now used to create more A32x, whose demand won't be falling any time soon, certainly not sufficiently to justify stopping THEIR production there in favor of a few dozen widebodies to a single carrier.

      This is to say nothing of the outsourced producers for parts unique to the A380, who ceased production, wrote off excesses, and moved on two years ago.

      If you're holding your breath for that, I'd sincerely suggest you exhale now.

    3. Nelson Diamond

      You may be right. But the production lines could be restarted in no time. When the 380's were build the A320 family was there already long before, so don't see what's the problem.
      And for the record, I've never hold my breath for anything/anyone. Let's just see what future brings.

    4. Sosongblue Guest

      Restarted in no time? You have to restart the supply chain, that alone would take a year or two….all for most likely 1 customer . That was the whole reason the line was shut down in the first place. The situation is unchanged.

    5. Nelson Diamond

      Sure they don't need some years to restart. 1 Customer?? Quite sure in the near future they would have more than one but surely not any as EK. Let's see the future.

Featured Comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Sean M. Diamond

Emirates staff are also receiving 24-weeks profit sharing (so basically a 50% salary bonus). Let's see what ALPA at various US carriers has to say about that!

2
glenn t Diamond

The expression 'Fuel surcharge' is only trotted out when fuel costs are in fact high. Other times it becomes ' carrier-imposed surcharge' or the like. Unfortunately, this charge, whatever they may call it, is baked into their fare structure and will never go away.

1
Sean M. Diamond

There is unlikely to be a renegotiation with the current setup where Dubai, Abu Dhabi, Sharjah and Ras Al Khaimah each have separate legacy BASAs. India has offered to renegotiate on the basis of a single unified UAE BASA, which the UAE airlines have opposed. Things may change if one of the Indian carriers gets into a deeper partnership with one of the UAE carriers (like when Etihad bought into Jet Airways - followed by a huge increase of Abu Dhabi traffic rights), but otherwise they will need to decide what kind of traffic mix to pursue (O&D versus 6th freedom) with the traffic rights available.

1
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