Dubai propping up Emirates airline with fresh capital amid coronavirus travel slump

With nearly all of its flights grounded, Dubai’s Crown Prince Sheikh Hamdan bin Mohammed Rashid Al Maktoum plans to inject equity into Emirates airline to keep it afloat during the COVID-19 pandemic.

al-monitor Members of cleaning staff in protective suits board an Emirates Airbus A380 to disinfect it during the coronavirus outbreak, Dubai, United Arab Emirates, March 5, 2020.  Photo by Emirates Airline/Handout via REUTERS.

Mar 31, 2020

With the global airline industry reeling from plunging demand due to coronavirus-related travel restrictions, the United Arab Emirates (UAE) announced March 31 it will inject much-needed equity into its state-owned airline, Emirates.

Crown Prince Sheikh Hamdan bin Mohammed Rashid Al Maktoum said on Twitter the government would be providing the region’s largest carrier with financial aid due to its “great strategic value as one of the main pillars of Dubai's economy.”

“Today, we renew our commitment to support a success story that started in the mid-1980s to reach its goal of sitting on the throne of global aviation,” he wrote.

Dubai’s deputy ruler didn’t specify how much emergency funding would be supplied but added that further details and new measures would be announced soon.

Emirati health officials have reported 664 cases of the coronavirus and a death toll of six. In an effort to halt the spread of the virus, the UAE has temporarily grounded all passenger flights and suspended entry visas until further notice. For two weeks beginning March 19, UAE residents currently outside of the country are barred from returning.

Late on March 30, authorities imposed a 24-hour, two-week-long curfew on the tourist district of Al-Ras. A daily overnight curfew was extended nationwide until April 5 as health officials work to disinfect public spaces.

On the heels of a similar decision from Emirates airline, low-cost carrier flydubai announced Monday it would be slashing salaries for its nearly 4,000 employees for three months beginning in April.

Between the end of January and March 11, more than 16,000 passenger flights were canceled in the Middle East, causing losses of $7.2 billion in revenue, the International Air Transport Association (IATA) said. The group, which represents 290 airlines around the world, estimates up to $200 billion in emergency aid for the aviation industry will be needed globally.

“With average cash reserves of approximately two months in the region, airlines are facing a liquidity and existential crisis,” the IATA said.

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