LONDON – According to government documents, it has emerged that Emirates (EK) has received a $2bn bailout from the Dubai Government.
This bailout comes following the financial downturn caused by COVID-19. The injection made by the government has not yet been announced publicly by the airline, with outlet Reuters breaking the story.
According to the media outlet, the Department of Finance declined to comment on the matter. The information was sourced from a prospectus about Dubai.
A Much-Needed Bailout?
With the airline receiving this bailout, it could be suggested as much-needed based on the initiatives it has taken up in recent times. Back in July, the airline announced it would cover customer’s COVID-19 expenses in the event that a flier contracts the virus.
The airline has also brought its flagship Airbus A380 aircraft back to the skies, which will produce higher costs due to the size of the aircraft.
Job Cuts Not Enough?
The airline also stated last month that it is ready to cut 9,000 positions from the business due to the pandemic. The bailout will no doubt be needed for additional overheads, such as aircraft storage, which has been a big thing for EK.
On top of this, the airline also took the decision to delay its Boeing 777X deliveries further to 2022 before offering the view of a order switch-over to the Boeing 787-10 Dreamliner instead.
Still Strong No Matter What?
For Emirates, it remains clear that this bailout will put the airline in a much stronger position going forward. It can continue to compete with the likes of Qatar Airways (QR) and Etihad Airways (EY) in the Middle-East who every day are launching new services.
The key theme within the Middle-Eastern carriers has been portfolio restarts, focusing on the most popular destinations and competing significantly.
Looking ahead, the likes of the Airbus A380 will continue to be a useful tool for the airline on the services it opens up, especially to fill up as many seats as possible.
Featured Image: Emirates Boeing 777-300ER. Photo Credit: Emirates