Founded in 1985, the Dubai-based airline known as Emirates has significantly disrupted the long-haul market with its one-stop hub and spoke strategy. Indeed, with its high levels of service, wide range of destinations, and competitive pricing, the airline has grown its traffic consistently over the past 22 years- with only the pandemic putting an end to the long streak.
Making the most of its geographical position between various populated corners of the world, the airline has convinced travelers to choose its services, transferring through Dubai to access the rest of the planet. Indeed, with its founding in 1985, the airline appears to be one of the first to implement this model for long-haul, trans-hemispheric flying, beat perhaps only by the older Turkish Airlines. Qatar Airways and Etihad have since adopted similar models, with the former founded in 1993 and the latter in 2003.
Decades of passenger growth
Looking at historical passenger volume data for Emirates, the airline has seen passenger growth every year for the last two decades, with the exception of its fiscal years ending on March 31st, 2020, and March 31st, 2021.
What’s more impressive is how quickly the airline has increased its passenger capacity. In 1998, the airline flew nearly 3.7 million passengers. By 2004, this was up to 10.4 million. In 2010 this would go up to 27.4 million and continue to increase every year after, until 2020, of course. Indeed, the year before COVID-19 struck the world, the airline had handled a staggering 58.6 million passengers. This equates to 1467% growth over 22 years.
The end of a hot streak
It’s always disappointing when a positive run comes to an end. While many airlines have had ups and downs from year to year, Emirates was one of the few carriers that was consistently growing with each new year. Unfortunately, it all came to an end in 2020.
Faced with border restrictions in most of its markets almost overnight, the UAE carrier would soon have to deal with its own restrictions imposed by the government of the United Arab Emirates. Indeed, it was on March 25th that the carrier had to suspend all passenger flights with its host country, the UAE, banning all inbound, outbound, and transit passenger flights.
Although the UAE’s ban was imposed on March 25th, other countries had acted earlier. Kuwait (a big market for Emirates) banned non-national arrivals in late February and suspended all commercial traffic on March 13th. Meanwhile, Saudi Arabia (an even larger market) took similar action the very next day. Thus, even though Emirates’ fiscal year ended on March 31st, 2020, enough traffic was halted to give the airline its first decrease in passenger numbers in over two decades.
In its 2020 Annual Report, the airline noted that it had carried 58.6 million passengers in its 2018-2019 year. However, Emirates noted that its 2019-2020 year only served 56.2 million passengers – a decrease of 4.2%.
With the airline’s 2020-2021 fiscal year fully covering the pandemic, its most recent annual report was even more devastating. Reporting a dismal 6.6 million passengers carried, Emirates saw a staggering 88.3% drop in this metric year-over-year. Indeed, this volume of traffic reflects the airline’s state in 2002!
Well on the road to recovery
When it announced its 2020/21 financial results, His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline, stated his confidence that Emirates and airport/airline services division dnata would recover and “be stronger than before.”
To set itself up for a strong recovery, the airline reports that it has successfully restructured various aircraft leases and loans. In fact, in its reporting, the airline says that “the support from aviation lessors and financing partners during these challenging times reflects the financial community’s confidence in Emirates’ business model, and its mid to longer term prospects.”
With countries the world over easing border restrictions amid rising vaccination rates, Emirates is looking to rebuild and start its streak all over again. Do you think it can achieve another 20+ year streak of passenger growth again? Let us know by leaving a comment.
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