As the worldwide aviation industry continues to cope with erratic demand and government restrictions limiting air travel, the issue of bailouts is often broached with extreme care and as an avenue of last resort. Not so at Emirates, which has an ace up its sleeve that guarantees its survival: it is truly too big and too essential to fail.
Emirates: The Essential Airline
Speaking to FlightGlobal, Emirates’ President Sir Tim Clark explains this almost nonchalantly:
“The shareholder, Dubai, needs the airline – it’s critical to its existence. So they’re going to have to step up in the short term to help us out which they will do, no doubt. Then we’ll get through it and we’ll start putting cash back on our balance sheet.”
And he’s right. In this era, we talk often about bailouts on Live and Let’s Fly, but there are few nations where one airline is so absolutely critical to the economy that it would be crazy to even consider letting it fail.
Emirates is the prime example. No groveling on Clark’s part will be necessary. Indeed, Dubai has flourished with Emirates as its economic engine, a state-run airline model that has legitimately proved indispensable.
Clarks says Emirates will “probably need cash from the shareholder sooner rather than later,” but notes that it is “holding our own” thanks to increased cargo service.
This month about half of all daily operations are exclusively cargo sectors. For example, on August 11thoperated:
- 113 passengers sectors with cargo in the belly
- 27 sectors operated with freighter aircraft
- 75 sectors operated with passenger aircraft with only cargo in the belly
- 6 sectors with cargo cargo loaded on seats and in overhead bins
- 8 sectors with seats moved from passenger aircraft carrying cargo
But even with revenue showing unexpected resilience, Emirates is operating only 40% of its daily operations pre-pandemic (and that includes the new concentration of cargo flights). Without an easing of travel restrictions that will likely only come with a vaccine or widespread, rapid, reliable testing, Emirates will continue to operate at a loss.
CONCLUSION
There’s nothing like taking the pressure off dire economic times than knowing that your owner depends upon you for its survival. Dubai has been wise to diversify its investment portfolio beyond oil and Emirates has proved an economic engine that has brought wealth and status to the otherwise tiny emirate. With that comes a high degree of confidence that Emirates is too essential to fail because it has single-handedly made Dubai a global hub.
Ok so he is being honest about his “shareholder” tell me what is the difference between EK and ANY US flag carrier?
It appears that “we” the US taxpayers are the in fact “shareholders” in our airlines
But no one U.S. airline can remotely be seen as critical for the whole nation as Emirates is for Dubai.
That’s why they decided to not renew contracts and let another 500+ crew go without any notice in advance. Great company.
They fired 100+ crew on maternity leave, leaving them with no medical insurance in the middle of their pregnancy. What about that?!
I love the contrast between the headline and the picture directly below it. Good stuff.
Didn’t Emirates need financial help from the UAE to stay afloat around 2008? I may be misremembering but I thought so.
Well on Wednesday 19th of aug they terminated alot more crew… really don’t get their logic… apparently alot more to come… 16000 crew at present numbers need to be 12000 doesnt matter what your record is like… ur just a number!!! Disgraceful
I love Emirates. But now we feel disappointed very much. They cancelled out ticket several times. Last Aug2nd we went Airport Trivandrum then only we know they cancelled our Flight. We came here January our ticket on April.since we are suffering lot. We have to go to Canada. Well spent PCR test we spent lots of money for E-pass. They didn’t inform the Flight cancelled. NowvEmirates will pay all of this or the old man 77 the wife 68 under very stressful life in India. Emirates is the responsibility of taking home. We have no more trust in Emirates. We have been 20 years flying with Emirates.
Notwithstanding Emirates has been one of the greatest airlines, things changed rapidly in their service. On top of the previous comments regarding laying off of pregnant women, I can confirm that this is a valid information. It is sad that these news were not spread in a way that could make a positive impact for these poor women. These women are unprotected now.
Hopefully, the governors there will pay attention to these sensitive matters.
I’m not sure the money laundering and tax dodging sectors of the Dubai economy will be that affected by Emirates.
Unfortunately, Emirates has failed to demonstrate a reasonable CSR which would protect the women in need. As a matter of fact, Emirates has laid off hundreds of pregnant women while they were on a Contactual maternity leave. I regret to recognize that none of the press have made any reference in that regard. It is a sign of humanity that we definitely all provide our sympathy to these women that left without medical coverage in the middle of their pregnancy.
Please share.