Emirates SkyCargo sees full-year revenue rise 5%, volumes up 1%

dnata

Emirates SkyCargo is reporting a revenue of AED 13.1 billion (USD 3.6 billion) for the full year 2018/19, an increase of 5.0 per cent over the previous year – as the Emirate Group posts its 31st consecutive year of profit – in an airfreight market facing “unrelenting downward pressure on yields and slowing demand”.

Saying the result was a “strong performance in a highly competitive market with dampening demand,” the cargo division of Emirates carried slightly more cargo tonnage than last year, up 1.0 per cent to reach 2.7 million tonnes in 2018. Cargo revenue now makes up 14 per cent of the airline’s total transport revenue.

Freight yield per Freight Tonne Kilometre (FTKM) increased for the 2nd consecutive year by a further 3.0 per cent, “demonstrating Emirates SkyCargo’s ability to retain and win customers on value despite fuel price increases, and a weakened demand in many markets,” it says.

Emirates SkyCargo’s total freighter fleet stood at 12 B777Fs and in addition to belly-hold capacity from Emirates’ new passenger destinations, Emirates SkyCargo launched a new freighter service to Bogota (Columbia), and resumed freighter services to Erbil (Iraq).

SkyCargo says it continued to develop innovative, bespoke products tailored to key industry sectors, including in April 2018, the launch of Emirates AOG, a new airfreight product designed to transport aircraft parts quickly across the globe.

This was followed in August by the launch of Emirates Pets and Emirates Pets Plus, which are new and enhanced air transportation products to ensure the safety and comfort of pets with services such as veterinary checks, document clearances, door-to-door transport, and the booking of return flights for pets.

emirates

dnata
For 2018-19, dnata recorded its most profitable year with AED 1.4 billion (USD 394 million) profit thanks to one-off gains from dnata’s divestment of its 22 per cent stake in the travel management company Hogg Robinson Group (HRG). Without this one-time transaction, dnata profits will be down 15 per cent compared to the same period last year.

Dnata’s total revenue grew to AED 14.4 billion (USD 3.9 billion), up 10 per cent, reflecting it says, continued business growth across its four business divisions – both organic through customer retention and new contract wins; as well as via its new acquisitions. Dnata’s international business now accounts for 70 per cent of its revenue.

With an eye on future growth, dnata invested close to AED 1.1 billion (USD 314 million) in acquisitions, new facilities and equipment, leading-edge technologies and people development during the year.

In 2018-19, dnata’s operating costs increased by 11 per cent to AED 13.1 billion (USD 3.6 billion), in line with organic growth across its business divisions, coupled with integrating the newly acquired companies mainly across its catering division and international airport operations.

Revenue from dnata’s UAE Airport Operations, including ground and cargo handling increased by 2.0 per cent to reach AED 3.2 billion (USD 878 million).

Dnata’s Cargo handling slightly declined by 1.0 per cent to 727,000 tonnes, impacted by lower demand in the overall air cargo market, it says.

In 2018-19, dnata strengthened its position in the freight forwarding industry with the acquisition of more shares to become the sole owner of Dubai Express and Freightworks LLC; and a 51 per cent majority stake in Bolloré Logistics LLC, UAE that operates in 106 countries.

The ground handler continued to invest in technology to improve operations and customer satisfaction including the launch of: A new cutting-edge resource management system that supports AI, autonomous vehicles, and advanced analytics to optimise staff operations at both DXB and DWC; and a new cargo tool, a first for ground handlers, to digitise the booking process and service, ensuring a seamless experience at cargo delivery bays, and a unified engagement for customers between freight forwarders and dnata.

Dnata’s International Airport Operations division grew revenue by 5.0 per cent to AED 4.0 billion (USD 1.1 billion), on account of increasing business volumes, opening of new locations and winning new contracts.  Of this. Cargo noted a growth of 1.0 per cent to 2.4 million tonnes of handled goods.

During the year, dnata won over 100 new contracts in key markets, including the US, Canada, the UK, Australia and Italy, and coupled it with solid customer retention.
Dnata significantly enhanced its cargo capabilities in 2018-19, debuting operations in Belgium with a new 14,000 sqm cargo centre at Brussels Airport; built tailor-made cargo solutions across new facilities in Dallas, London Heathrow, Adelaide and Karachi, and refurbished existing facilities in Singapore and Amsterdam.

In response to customer growth, dnata also invested to expand at Gatwick and Manchester, and opened new cargo facilities in Islamabad and Multan airports including Pakistan’s first automated storage and retrieval system.

Dnata also invested in its pharma facilities, offering more handling capability than any other company in the UK, the Netherlands, Australia and Singapore, it says. Its ability to provide safe and reliable pharma handling services globally was recognised with IATA’s CEIV Pharma certification in Dubai and Toronto, and GDP certification in London and Zurich.

In Italy, dnata increased its share in Airport Handling SpA, a Milan-based ground handler, to 70 per cent.  At Zurich Airport, dnata was re-awarded the ground and cargo handling licence until 2025, enabling it to serve customers without interruptions.  In North America, dnata launched ground and cargo handling at Los Angeles and began passenger services at New York’s JFK.

Emirates airline
Emirates’ total passenger and cargo capacity crossed the 63 billion mark, to 63.3 billion ATKMs at the end of 2018-19, cementing its position as the world’s largest international carrier. The airline moderately increased capacity during the year over 2017-18 by 3.0 per cent, with a focus on yield improvement, it says.

Emirates received 13 new aircraft during the financial year, comprising of seven A380s and six B777-300ERs, including the last B777-300ER on its order book. The next B777 delivery is planned for 2020, when Emirates receives its first B777X aircraft.

During 2018-19, Emirates phased out 11 older aircraft, bringing its total fleet count to 270 at the end of March. This fleet roll-over involving 24 aircraft was again one of the largest managed in a year, keeping Emirates’ average fleet age at 6.1 years.

Despite stiff competition across its key markets, Emirates increased its revenue by 6.0 per cent to AED 97.9 billion (USD 26.7 billion). The relative strengthening of the US dollar against currencies in many of Emirates’ key markets had an AED 572 million (USD 156 million) negative impact to the airline’s bottom line, a stark contrast to the previous year’s positive currency impact of AED 661 million (USD 180 million).

Total operating costs increased by 8.0 per cent over the 2017-18 financial year. The average price of jet fuel climbed by a further 22 per cent during the financial year after last year’s 15 per cent increase. The airline’s fuel bill increased substantially by 25 per cent over last year to AED 30.8 billion (USD 8.4 billion) – the biggest-ever fuel bill for the airline, accounting for 32 per cent of operating costs, compared to 28 per cent in 2017-18. Fuel remained the biggest cost component for the airline.

Against a backdrop of high fuel prices, strong competitive pressure, and unfavourable currency impact, the airline reported a profit of AED 871 million (USD 237 million), a decline of 69 per cent over last year’s results, and a profit margin of 0.9 per cent.

Emirates Group
Overall, the Emirates Group posted its 31st consecutive year of profit and steady business expansion with a profit of AED 2.3 billion (USD 631 million) for the financial year ended 31 March 2019, down 44 per cent from last year. The Group’s revenue reached AED 109.3 billion (USD 29.8 billion), an increase of 7.0 per cent over last year’s results.

Emirates Sheikh Ahmed bin Saeed Al Maktoum
Sheikh Ahmed bin Saeed Al Maktoum

Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group, says: “2018-19 has been tough, and our performance was not as strong as we would have liked. Higher oil prices and the strengthened US dollar eroded our earnings, even as competition intensified in our key markets.

“The uptick in global airfreight demand from the previous year appears to have gone into reverse gear, and we also saw travel demand weaken, particularly in our region, impacting both dnata and Emirates.

“Every business cycle is different, and we continue to work smart and hard to tackle the challenges and take advantage of opportunities. Our goal has always been to build a profitable, sustainable, and responsible business based in Dubai, and these principles continue to guide our decisions and investments.

“In 2018-19, Emirates and dnata delivered our 31st consecutive year of profit, recorded growth across the business, and invested in initiatives and infrastructure that will secure our future success.”

In 2018-19, the Group collectively invested AED 14.6 billion (USD 3.9 billion) in new aircraft and equipment, the acquisition of companies, modern facilities, the latest technologies, and staff initiatives, a significant increase over last year’s investment spend of AED 9.0 billion (USD 2.5 billion).

In February, Emirates announced a commitment for 40 A330-900s and 30 A350-900s worth USD 21.4 billion at list prices in an agreement signed with Airbus, to be delivered from 2021 and 2024 respectively. The airline will also receive 14 more A380 deliveries from 2019 until the end of 2021, taking its total A380 order book to 123 units.

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Emirates SkyCargo sees full-year revenue rise 5%, volumes up 1%
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Emirates SkyCargo sees full-year revenue rise 5%, volumes up 1%
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Emirates SkyCargo is reporting a revenue of AED 13.1 billion (USD 3.6 billion) for the full year 2018/19, an increase of 5.0 per cent over the previous year – as the Emirate Group posts its 31st consecutive year of profit – in an airfreight market facing "unrelenting downward pressure on yields and slowing demand".
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AsiaCargoBuzz.com
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