Emirates to get a bailout?
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Emirates to get a bailout?
DUBAI - Emirates needs a bailout from its sole shareholder, the Dubai government, to survive the corona crisis, CEO Tim Clark said in an interview with FlightGlobal. He does not mention a deadline, but says he will need the money "sooner than later".
Clark has no doubts he will get that bailout. "The shareholder, Dubai, needs us." Emirates is critical to the emirate's role as an international hub and tourist destination. That's why the government won't let the company down, Clark knows.
Emirates now operates some 230 flights a day, just over 40 percent of the normal number. Half of this is with passengers and the other half with cargo only. Last week, 123 Boeing 777s and 6 of 115 Airbus A380s were active for the airline.
Clark says he is satisfied with the occupancy rate on A380 flights. This is enough to cover the operational costs and make a little profit. The A380 is now being deployed to six airports, including Schiphol, but he expects more routes soon.
Partly because Emirates has transported a lot of cargo in recent months, quite a bit of money has come in: almost 2 billion dollars in cash sales since April 1. But that cannot prevent society from needing a capital injection.
Clark has no doubts he will get that bailout. "The shareholder, Dubai, needs us." Emirates is critical to the emirate's role as an international hub and tourist destination. That's why the government won't let the company down, Clark knows.
Emirates now operates some 230 flights a day, just over 40 percent of the normal number. Half of this is with passengers and the other half with cargo only. Last week, 123 Boeing 777s and 6 of 115 Airbus A380s were active for the airline.
Clark says he is satisfied with the occupancy rate on A380 flights. This is enough to cover the operational costs and make a little profit. The A380 is now being deployed to six airports, including Schiphol, but he expects more routes soon.
Partly because Emirates has transported a lot of cargo in recent months, quite a bit of money has come in: almost 2 billion dollars in cash sales since April 1. But that cannot prevent society from needing a capital injection.
Dubai Inc will have to review its entire business model, which went past the point of being sustainable some years ago. No doubt though that EK was instrumental in supporting the economic growth over the last 20yrs, so ICD and the government will definitely bail them out.
The real question is what does the future look like for Dubai, and for EK? Personally I'm more bearish about the Dubai economy than the future of the airline. Its going to take a miracle for them to turn this around, and many of the factors influencing their future are outside their control. Flashy marketing will only get you so far... Emirates on the other hand "just" need to right-size to the market. Tough decisions are being made, but the airline business model will fundamentally remain the same.
The real question is what does the future look like for Dubai, and for EK? Personally I'm more bearish about the Dubai economy than the future of the airline. Its going to take a miracle for them to turn this around, and many of the factors influencing their future are outside their control. Flashy marketing will only get you so far... Emirates on the other hand "just" need to right-size to the market. Tough decisions are being made, but the airline business model will fundamentally remain the same.
