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Coronavirus: Emirates predicts 18-month lull in air demand

Dubai carrier posts 32nd straight year of profits but says February saw 'a sudden and tremendous drop in demand'
Emirates' profits were boosted by a fall in oil prices, causing a 15 percent decline in fuel costs to $7.2bn (Reuters)

Gulf aviation giant Emirates said on Sunday it would take at least 18 months for travel demand to return to "a semblance of normality," despite reporting bumper pre-coronavirus pandemic profits. 

The Dubai carrier, the largest in the Middle East, posted 1.1 billion dirhams ($288m) in net profit for the financial year ending March, up from $237 million the previous year.

It was the 32nd straight year of profit for Emirates, which operates a fleet of 115 Airbus A-380 superjumbos and 155 Boeing-777 airliners.

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It had suspended flights on 22 March before resuming some services two weeks later.

Emirates Group chief Sheikh Ahmed bin Saeed al-Maktoum said the airline had performed strongly in the first 11 months of the fiscal year.

"However, from mid-February things changed rapidly as the Covid-19 pandemic swept across the world," he said in a statement.

This caused "a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions."

"We expect it will take 18 months at least, before travel demand returns to a semblance of normality," he added.

Government aid

Emirates' profits were boosted by a fall in oil prices, causing a 15 percent decline in fuel costs to $7.2bn - around 31 percent of its operating costs.

However, the carrier saw its annual revenues decline by six percent to $25bn due to the coronavirus pandemic and the closure of a runway at Dubai airport.

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The airline said it had transported just over 56 million passengers in the fiscal year, a drop of four percent year-on-year, while cargo had declined by a tenth to 2.4 million tonnes.

The strong US dollar eroded $272m of profits, while intensive competition also affected the bottom line, it said.

Even before the coronavirus pandemic paralysed the aviation industry, Emirates had slimmed its orders from both Airbus and Boeing, cutting tens of billions of dollars-worth of aircraft, AFP reported.

The government of Dubai, whose economy heavily depends on aviation and tourism, said last month it would inject capital into Emirates to help it cope with the impact of the coronavirus.