Emirates airline announced a “significantly reduced” annual loss of $1.1 billion dollars on Friday, five times lower than a year before, as pandemic travel restrictions ease.
Losses came in at 3.9 billion dirhams ($1.1 billion) in the 2021-2022 financial year to March, with revenues up 91 percent, as the airline expanded its global capacity and reinstated flights, Emirates said in a statement.
The Middle East’s largest carrier said it received a capital injection of $954 million from its owner, the government of Dubai, to help it survive the crisis.
“This year, we focussed on restoring our operations quickly and safely wherever pandemic-related restrictions eased across our markets,” said its chairman and chief executive, Sheikh Ahmed bin Saeed Al-Maktoum.
“Business recovery picked up pace particularly in the second half of the year. Robust customer demand drove a huge improvement in our financial performance compared to our unprecedented losses of last year and we built up our strong cash balance.”
In Friday’s statement, it said the Emirates Group — which includes ground-handling firm Dnata — recorded an annual loss of 3.8 billion dirhams ($1.0 billion), but with revenues up by 86 percent and “strong customer demand”.
Over the fiscal year, Emirates carried 19.6 million passengers, up from 6.6 million in the same period of the previous year.
“2021-22 was also a significant year as the UAE marked its 50th anniversary and hosted the world at Expo 2020 Dubai which generated increased global engagement and visitation to the UAE,” Sheikh Ahmed said.
– ‘Recalled and rehired’ –
In the previous year, Emirates posted a $5.5 billion annual loss, its first in more than three decades, after the pandemic devastated the aviation industry.
Like many other major airlines, it announced heavy layoffs when its fleet was grounded.
In Friday’s statement, it said that as operations ramped up, “employees previously on furlough or made redundant were recalled and rehired, and new recruitment drives were held”.
The group’s total workforce increased by 13 percent to 85,219 employees, it added.
Emirates specialises in long-haul flights, with its fleet solely composed of large Airbus A380 and Boeing 777 aircraft, dozens of which it grounded amid a lack of passenger traffic.
It added that the group invested $2.2 billion in new aircraft and facilities and received its final five new A380 plane during the financial year.
Emirates is currently flying to 140 destinations, almost its full travel network of 158 destinations in 85 countries before the pandemic.
Tourism has long been an economic mainstay of Dubai, which welcomed more than 16 million visitors in 2019. Before the pandemic, the aim had been to reach 20 million.
After an initial strict lockdown, life in the Gulf emirate — one of the first destinations to welcome visitors again in July 2020 — has returned to largely normal, with restaurants and hotels up and running and beaches open to the public.
The United Arab Emirates, made up of seven emirates including Dubai, has launched an energetic vaccination drive with some of the highest inoculation rates worldwide.
Biden signs major semiconductors investment bill to compete against China
President Joe Biden signed into law Tuesday a multibillion dollar bill boosting domestic semiconductor and other high-tech manufacturing sectors that US leaders fear risk being dominated by rival China.
The Chips and Science Act includes around $52 billion to promote production of microchips, the tiny but powerful and relatively hard-to-make components at the heart of almost every modern piece of machinery.
Tens of billions of dollars more are allocated for scientific research and development.
The White House says the government commitment to bolstering high-tech industries is already drawing in large-scale private investors, with some $50 billion in new semiconductor investment alone. The lion’s share of that is a plan announced by US firm Micron to put $40 billion into domestic expansion by 2030.
Biden said at a White House speech that the cash injection from the Chips Act will help “win the economic competition in the 21st century.”
Entrepreneurs are “the reason why I’m so optimistic about the future of our country,” he said, and “the Chips and Science Act supercharges our efforts to make semiconductors here in America.”
One of the Democrat’s key themes since he took office has been the need to revamp US leadership in cutting-edge innovation and rebuild the homegrown industrial base in the face of China’s mammoth state-backed investments.
Semiconductors are of particular concern because they are vital to everything from washing machines to sophisticated weapons and nearly all are made abroad.
Although the semiconductor was invented in the United States, the country only produces around 10 percent of global supply, according to the White House, with some 75 percent of US supplies coming from east Asia.
Biden is also counting on the Chips Act to generate enthusiasm among voters, as his Democratic party tries to defend a thin congressional majority from a Republican takeover in this November’s midterm elections.
He told Americans that studies show the expansion of factories will create around a million construction jobs over the next six years — and these will be “union jobs” that pay “the prevailing wage.”
On Wednesday, Biden will sign another bill increasing funding for military veterans exposed to toxins. Like the Chips bill, this won bipartisan support in the usually bitterly divided Congress.
Shortly, Biden is also expected to be signing an enormous domestic investment bill — backed only by Democrats — aimed at fighting climate change and reducing health care costs.
Reflecting on the string of successes in Congress and the sudden momentum for his long stalled agenda, Biden predicted that “people will look back at this week and all we passed, and all we moved on, that we met the moment at this inflection point in history.”
“We bet on ourselves, believed in ourselves and recaptured the story, the spirit and the soul of this nation,” he said.
US regulators clear Boeing to resume 787 deliveries
After more than a year, aviation giant Boeing will be allowed to resume deliveries of its 787 Dreamliner aircraft “in the coming days,” after the company made changes to its manufacturing process, US air safety regulators announced Monday.
Deliveries of the top-selling widebody plane have been halted since spring 2021, so the news will be welcomed by US airlines and travelers who have suffered from massive delays and canceled flights in recent weeks, partly due to the shortage of aircraft.
“Boeing has made the necessary changes to ensure that the 787 Dreamliner meets all certification standards,” the Federal Aviation Administration said in a statement.
The plane’s travails date to late summer 2020, when the company uncovered manufacturing flaws with some jets. Boeing subsequently identified additional issues, including with the horizontal stabilizer.
The difficulties curtailed deliveries between November 2020 and March 2021. Boeing suspended deliveries later in spring 2021 after more problems surfaced.
Acting FAA Administrator Billy Nolen met with safety inspectors in South Carolina last week to confirm they were satisfied with the company’s improvements, which were made to ensure they comply with standards and to identify potential risks after defects were uncovered on the plane.
“The FAA will inspect each aircraft before an airworthiness certificate is issued and cleared for delivery,” the statement said. “We expect deliveries to resume in the coming days.”
– Cleared for takeoff –
A company spokesman told AFP that Boeing will “continue to work transparently with the FAA and our customers toward resuming 787 deliveries,” but did not confirm the firm had received final FAA approval.
During a July 27 earnings conference call, Chief Executive Dave Calhoun described the company was “on the verge” of garnering approval, though he declined to give a precise target date.
At the end of June, Boeing had 120 Dreamliner planes in inventory and was producing the jet “at very low rates,” the company said in a filing.
The company’s stock price gained ground on the news, closing 0.5 percent higher.
Inability to deliver the Dreamliner has dragged down Boeing’s profits, which plunged 67 percent in the second quarter. And the manufacturing changes have led to billions in additional costs for the company.
The firm has delivered just over 1,000 of the planes since it was first introduced in 2004.
The enhanced regulatory scrutiny of the 787 and other Boeing planes comes on the heels of a pair of crashes in 2018 and 2019 on the 737 MAX, which led to aircraft being banned from the skies globally for more than a year.
But the MAX has since returned to service, enabling Boeing to ramp up production of the planes, collect meaningful revenues and announce significant new orders at the Farnborough Airshow earlier this month.
Even so, Boeing’s backlog of orders in the pipeline lags behind that of archrival Airbus.
No recession in Switzerland this year: chief economist
Switzerland does not expect to dip into recession this year despite the threat of an energy supply squeeze, the government’s chief economist said Sunday.
The Swiss economy is “doing well” despite the impact of the war in Ukraine on energy prices, Eric Scheidegger told the SonntagsZeitung newspaper.
He said it was down to companies to steel themselves for the possibility of power shortages in the winter months.
“We may have to revise our economic forecast downwards for next year. The revised forecast will be published on September 20. However, we do not expect a recession for this year,” Scheidegger said.
“We run the risk of an energy supply bottleneck in winter. If there are persistent production interruptions in the EU and we ourselves have a gas shortage, it becomes problematic.
“In our negative scenario, we expect zero growth for 2023 instead of growth of almost two percent.”
Despite the threat of power shortages and the effects of the war in Ukraine, Scheidegger does not see a serious economic crisis heading towards Switzerland.
“At present, the economy is still doing well. Current indicators show that the economy in this country also developed well in the second quarter — after the outbreak of the war in Ukraine,” he said.
“Economic support measures such as general perks or tax relief are currently therefore neither necessary nor helpful,” he added.
– ‘Foreseeable events’ –
Scheidegger said the Swiss economy was less susceptible to high energy prices than other European countries as gas accounted for only five percent of its total energy consumption.
He said the government would discuss possible measures to curb high energy prices in the coming weeks, which could involve reducing health insurance premiums for low-income households.
The State Secretariat for Economic Affairs official said the help for businesses during the Covid-19 pandemic could not become the norm during economic downturns.
“It’s been known since spring that there can be a power shortage in winter. Companies have time to prepare for this,” he said.
“Companies can, and must, take this operational risk into account… it is up to companies to prepare for foreseeable events.”
As for inflation, he said Switzerland was “an island of bliss” compared to the United States, and inflation was likely to fall before the end of the year.
“At 3.4 percent, inflation is much lower here than in other countries. Core inflation — inflation excluding fresh food, energy and fuel — is at two percent,” he said.
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