Emirates Airline Turns To Dubai Government For $2 Billion In Support Amid Coronavirus Crisis

The Dubai government has injected AED7.3 billion ($2 billion) into Emirates so far this year to help the airline survive the coronavirus crisis, according to a media report.

Citing details gleaned from a bond prospectus, Reuters reported that the money has been handed over to the carrier since March. Emirates is a critical element in the Dubai economy, bringing in tourists and business travelers and supporting the city state’s position as a regional trading hub.

However, the airline has been badly affected by the coronavirus pandemic and the grounding of most of its fleet in response to the healthcare crisis. Emirates halted all passenger flights on 25 March.

On 6 April some limited services resumed and since then the airline has gradually been expanding its route network again. It currently flies to around 83 destinations, according to its website, but isn’t expecting to resume services to all 157 of its pre-lockdown destinations until next summer.

In late March, Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum said the city’s government was fully committed to supporting the airline and would inject equity into the business. Sheikh Hamdan, who is also chairman of the Dubai Executive Council, promised further details would be announced at a later date, although there has been no official announcement of support since then.

In its most recent set of results, which cover the 12 months to 31 March this year, Emirates made a profit of AED1.1 billion, some 21% up on the previous year’s figure. That was despite passenger numbers slipping back 4% year-on-year to just over 56 million.

Disappearing passengers

If its experience during the pandemic is similar to nearby rivals such as Etihad and Turkish Airlines, it could have seen passenger numbers collapse by as much as 99% at the worst point in the pandemic.

One critical issue facing airlines is how to persuade passengers it is safe for them to fly again, not least at a time when sudden changes in official travel guidance can leave passengers facing weeks of unanticipated self-isolation after they fly.

Emirates had a fleet of some 270 planes and almost 60,000 staff at the end of March. It recently asked some employees to take voluntary unpaid leave in a bid to preserve cash.