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Airlines0613
Posts: 175
Joined: Thu Jan 07, 2016 6:06 am

Re: Emirates seeking loans on top of government bailout

Mon Apr 06, 2020 10:03 pm

Vladex wrote:
CALMSP wrote:
Vladex wrote:
It must be for expansion , maybe to restart A380 production. EK hasn't really lost money and is losing minimal amounts now, in fact they restarted some flights.


define minimal amounts. There is no way that EK is different from other airlines that are losing millions every day.


It's widely known that among others Etihad , Qatar and Cathay in the last year have lost lots of money. On the other hand US3 will be losing lots of money because of their 10 hubs each slow shutdown and very painful restart. EK is obviously different and they were flying almost normally and then had instant shutdown. Also their brand is way above others and the few passengers will be looking for something reliable when they do restart.

Holds no valid point to explain that EK is still profitable or barely losing money. I highly doubt its still profitable, since international travel is the hardest hit at the moment. EK is completely international, meaning they are at a greater risk than other airlines. If I recall correctly, EK was barely making a profit the quarter before COVID-19 really hit. Everything, including the bailout and loans, points to EK bleeding a lot of money at the moment.
 
dtw2hyd
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Re: Emirates seeking loans on top of government bailout

Mon Apr 06, 2020 10:37 pm

Vladex wrote:
CALMSP wrote:
Vladex wrote:
It must be for expansion , maybe to restart A380 production. EK hasn't really lost money and is losing minimal amounts now, in fact they restarted some flights.


define minimal amounts. There is no way that EK is different from other airlines that are losing millions every day.


It's widely known that among others Etihad , Qatar and Cathay in the last year have lost lots of money. On the other hand US3 will be losing lots of money because of their 10 hubs each slow shutdown and very painful restart. EK is obviously different and they were flying almost normally and then had instant shutdown. Also their brand is way above others and the few passengers will be looking for something reliable when they do restart.


Really, US Carriers had the most capacity discipline in the world to a point it could be called capacity restriction with highest margins. Even United had a decent margin last year. Southwest operates on higher margins than Emirates.

Domestic markets will rebound first followed by international.

US domestic is world's largest aviation market, with less capacity going forward, US carriers can command higher fares with lower level of service, hence higher margins.

What will EK do with its mostly leased fleet. Sure they can fire most of the 100k workforce, but they have to pay monthly leases or return planes and pay penalty.

Upthread Lightsaber said, EK should be putting their Ground Handling equipment and even aircraft parts as collateral. How much of it does EK own. EK Engineering may have $10 Billion worth of parts in the warehouse owned by someone else. EK's "lets not own anything" model is coming back to bite.

All City State Sixth Freedom carriers will have tough time going forward. It is up to their governments to bailout or say goodbye.
All posts are just opinions.
 
Scotron12
Posts: 496
Joined: Fri Mar 01, 2019 2:13 pm

Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 12:31 am

Dubai government will do what's required to keep EK going. And rightly so. They are too integral to Dubai for them to go under.
 
KingB123
Posts: 191
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 4:10 am

I wonder what if the expo gets cancelled. Thats a nail in Dubai and Emirates coffins
King B
 
Toinou
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 6:07 am

KingB123 wrote:
I wonder what if the expo gets cancelled. Thats a nail in Dubai and Emirates coffins


At the moment, it is not cancelled, it is postponed.

I'm wondering on a few aspects on which I would like to have your opinions:
1) Probably it would make sense for EK to reduce massively its workforce at the moment so to reduce costs. I guess that local laws are pretty open-minded about that kind of option. The aspect on which I'm wondering is that, if I remember correctly, they had difficulties to keep their staff, especially pilots. So, if they let them go, can that hinder the rebound?

2) Some people talked about the option of EK being helped/taken over by UAE government and I have to say that it may make sense to me as EK is a very important tool to the entire country. But, to what extant is there such a thing as a UAE? I was under the impression that UAE was more a confederation than a federation: the central government seems to have very little power (and money) except maybe for defence purpose and that most of the rest is handled at emirate level. Am I right?
 
directorguy
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 6:18 am

Western727 wrote:
TObound wrote:
EK bankrolls Dubai. Despite everyone thinking it's the other way around, EK is a profit centre for the Government of Dubai. And more importantly an economic enabler and multiplier that brings tourists, investors and commerce through the city. Dubai will never be in a position to substantially bail out EK because any hit to EK means a simultaneous and amplified hit to Dubai Inc.

There's an obvious way out.

1) Merge EY and EK.
2) Centralize at DWC.
3) Build rail transit to Dubai and Abu Dhabi.
4) Close DXB and use the freed up real estate for other purposes.

Now let's see if the Al-Maktoums can swallow their pride and save their emirate.


With you on the above, except for #2, though I don't necessarily disagree; rather, I seek clarification for I've not been to the country yet (was supposed to be there 2 weeks ago to visit my expat sister and her family, but that obviously got postponed...to the last week of November). I've seen photos of DXB's terminals and they appear to have been well-built. Why do you propose "tossing" DXB in favor of DWC? My initial thought is that DXB is better located relative to Dubai itself, so I look forward to your (and others') insight.


The conventional wisdom is that DWC, due to its proximity to "New Dubai" (where a lot of the flashy real estate developments are being built) and the emirate of Abu Dhabi, is in an ideal location to serve as a gateway to both cities (and by default the rest of the UAE as well). DWC would be purpose built and optimal as a transfer hub and would have room to grow, whereas DXB is right in the middle of Dubai and is bound by major highways.
One solution would have been shut down DXB and move everything to DWC. A rail link could then be built between DWC and Deira (where DXB is located), though it would have to be better than the regular Dubai Metro. The site of the old DXB would be worth billions not to mention the adjacent areas (currently warehouses, low rise buildings etc).
Before COVID-19, EK was experiencing several problems. Pleateaued growth, restrictive bilaterals, rejuvenated national airlines in other countries, newer plane designs, changing airline economics, all began to negate the need for DWC. They ended up postponing the expansion of DWC more or less indefinitely. With the current COVID-19 crisis, I see Dubai collapsing, and DWC being nothing more than a hub for EK SkyCargo.
 
Prost
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 6:25 am

I think the economic fallout is going to be brutal on middle class tourism. If Dubai and EK cater to that demographic I can see tough times for them as well as every other airline.
 
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enzo011
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 8:34 am

Toinou wrote:
2) Some people talked about the option of EK being helped/taken over by UAE government and I have to say that it may make sense to me as EK is a very important tool to the entire country. But, to what extant is there such a thing as a UAE? I was under the impression that UAE was more a confederation than a federation: the central government seems to have very little power (and money) except maybe for defence purpose and that most of the rest is handled at emirate level. Am I right?


I am not sure exactly the power arrangements of the UAE government, but what is in the interest of Dubai may not be in the interest of Abu Dhabi. So I don't see how the UAE government is able to influence much as the interests of the rulers will not always be aligned.

A guess as good as any I would think is that if EK is suffering financially and needs financial help it is Etihad that survives as the name of the UAE airline. I mean they got them to change the name of one vanity project, why not the others that needs bailing out as well?
 
mmo
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 12:42 pm

enzo011 wrote:

I am not sure exactly the power arrangements of the UAE government, but what is in the interest of Dubai may not be in the interest of Abu Dhabi. So I don't see how the UAE government is able to influence much as the interests of the rulers will not always be aligned.

A guess as good as any I would think is that if EK is suffering financially and needs financial help it is Etihad that survives as the name of the UAE airline. I mean they got them to change the name of one vanity project, why not the others that needs bailing out as well?


The Emir of Abu Dhabi is also the President of the UAE, the Emir of Dubai is the Vice President of the UAE. Most of the money is in Abu Dhabi. Dubai relies more on tourism and banking, while Abu Dhabi relies on those to a much lesser extent. Abu Dhabi has the gas and that is where the majority of the money comes from. During the downturn in the Gulf, Emirates needed cash which Dubai couldn't give. There was an approach to Abu Dhabi and part of the offer was to take an equity position in Emirates. That went no place. A loan was given to Emirates. In reality, the government and the Emirs couldn't let Emirates fail. And as long as there is enough money to go around Emirates will stay alive financially. EY can't become Emirates overnight which would have to happen and Egos being what they are, EK and EY would never do an out and out merger.
If we weren't all crazy we'd all go insane!
 
Toinou
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 1:13 pm

Thanks, you're confirming what was my impression. There couldn't be an intervention on that topic by the federation but maybe Abu Dhabi (and maybe other emirates) could.
I guess it could even be the occasion for another ego-flattering renaming like already happened with some projects in Dubai. (Which may be a bad commercial move in my opinion as Emirates is a well established brand but it is clearly not the only aspect playing now.)
 
goosebayguy
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 5:07 pm

Dubai airport and EK are 85% of the Dubai economy. Quite a staggering figure.
 
Western727
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 5:37 pm

goosebayguy wrote:
Dubai airport and EK are 85% of the Dubai economy. Quite a staggering figure.


I've found myself wondering what has (or will) become of the gold-dispensing ATMs in Dubai, as well as the many other displays of lavishness...and Expo 2020, which is supposed to happen in the fall season (November, I believe).

We rescheduled our 13-22 March trip to DXB...to 20-29 November because of the pandemic (interestingly, the 22 March EK211 flight from DXB to IAH was *the* last one before EK shut down), so I truly hope my family of 4 will be able to make the November trip to visit my expat sister and her family, who live in Ruwais City, about 3 hours WSW of Dubai and 2 hours WSW of Abu Dhabi.
Jack @ AUS
 
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Revelation
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 6:45 pm

mmo wrote:
In reality, the government and the Emirs couldn't let Emirates fail. And as long as there is enough money to go around Emirates will stay alive financially. EY can't become Emirates overnight which would have to happen and Egos being what they are, EK and EY would never do an out and out merger.

How much money does it take to keep lease payments on 115 A380 and 142 777 going when next to none are flying? Seems like a lot. Then when recovery happens how much money do you lose on each flight since these planes have so many seats to fill yet many pax will not be flying because they will have burned through a lot of their savings to get through the crisis? And at the same time you start to have to spend money to retrain everyone for A350 and 787 coming in, buy sims and spares, etc. Meanwhile all that Dubai Expo spending ($33B or so) will not be providing yields. Seems a giant rethink will be needed.

It's a strange time. So much about EK and Dubai was about massive growth. It worked for a long time, but now circumstances are different and they have significant exposure. There's more to life than fair weather sailing.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
mxaxai
Posts: 1979
Joined: Sat Jun 18, 2016 7:29 am

Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 7:08 pm

Revelation wrote:
How much money does it take to keep lease payments on 115 A380 and 142 777 going when next to none are flying? Seems like a lot.

Emirates Group reported costs for debt service, including lease payments, of about US$ 5.7 billion in FY 2018-19. Probably the same can be expected for FY 2019-20.

That's US$ 15 million per day. Compare Delta burning cash four times as fast, currently. (https://www.businessinsider.com/delta-c ... ?r=DE&IR=T)

https://www.emirates.com/english/about- ... l-reports/
 
xwb777
Posts: 908
Joined: Wed Jan 17, 2018 4:13 pm

Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 7:57 pm

Revelation wrote:
mmo wrote:
In reality, the government and the Emirs couldn't let Emirates fail. And as long as there is enough money to go around Emirates will stay alive financially. EY can't become Emirates overnight which would have to happen and Egos being what they are, EK and EY would never do an out and out merger.

How much money does it take to keep lease payments on 115 A380 and 142 777 going when next to none are flying? Seems like a lot. Then when recovery happens how much money do you lose on each flight since these planes have so many seats to fill yet many pax will not be flying because they will have burned through a lot of their savings to get through the crisis? And at the same time you start to have to spend money to retrain everyone for A350 and 787 coming in, buy sims and spares, etc. Meanwhile all that Dubai Expo spending ($33B or so) will not be providing yields. Seems a giant rethink will be needed.

It's a strange time. So much about EK and Dubai was about massive growth. It worked for a long time, but now circumstances are different and they have significant exposure. There's more to life than fair weather sailing.


I think in regards for training pilots for the upcoming A350s and B787s, I think the airline might train its pilots at Etihad. Just my opinion :)
 
Scotron12
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Re: Emirates seeking loans on top of government bailout

Tue Apr 07, 2020 9:15 pm

xwb777 wrote:
Revelation wrote:
mmo wrote:
In reality, the government and the Emirs couldn't let Emirates fail. And as long as there is enough money to go around Emirates will stay alive financially. EY can't become Emirates overnight which would have to happen and Egos being what they are, EK and EY would never do an out and out merger.

How much money does it take to keep lease payments on 115 A380 and 142 777 going when next to none are flying? Seems like a lot. Then when recovery happens how much money do you lose on each flight since these planes have so many seats to fill yet many pax will not be flying because they will have burned through a lot of their savings to get through the crisis? And at the same time you start to have to spend money to retrain everyone for A350 and 787 coming in, buy sims and spares, etc. Meanwhile all that Dubai Expo spending ($33B or so) will not be providing yields. Seems a giant rethink will be needed.

It's a strange time. So much about EK and Dubai was about massive growth. It worked for a long time, but now circumstances are different and they have significant exposure. There's more to life than fair weather sailing.


I think in regards for training pilots for the upcoming A350s and B787s, I think the airline might train its pilots at Etihad. Just my opinion :)


How much training is required to go from B777 to B787...and an A380 to an A350? However, Im sure there are many pilots right now available already experienced in both types.
 
Toinou
Posts: 285
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 7:22 am

goosebayguy wrote:
Dubai airport and EK are 85% of the Dubai economy. Quite a staggering figure.


Could you provide an explanation about that figure?
Directly, transport is at about 12% (source: https://www.ft.com/content/4d169d0c-4be ... 9067e0f50d). I'm aware that they are many side effects to bringing large number of people but 85% seems like every aspect of the economy that is even remotely linked to foreign countries is attributed to EK.
 
Insertnamehere
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 7:25 am

Dubai wouldn't be the huge city it is today without EK as it has artificially created Dubai into an international destination. The Emirate of Dubai and the entire UAE will bankroll just about anything to ensure the airline can stay afloat.
 
worldranger
Posts: 258
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 9:01 am

It’s a perfect storm in Dubai.

Some of the big hitters, EMAAR, DAMAC, Jumeirah Hotel Group & of course EK - amongst many others, are bleeding heavily.

White elephants aplenty; The World Islands, DWC, Palm Jebel Ali & Deira, QE2. yada yada...ego decisions that ignored common sense.

That said no Emirates - no Dubai.

They have two options - Abu Dhabi or the International marketplace (cue China)

They will have to keep it local - merge already & move to DWC. High speed rail to both cities, downtown check in etc.

Will it happen? Well if they haven’t learned from the elephants above - no hope.
 
Jomar777
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 9:11 am

TObound wrote:
EK bankrolls Dubai. Despite everyone thinking it's the other way around, EK is a profit centre for the Government of Dubai. And more importantly an economic enabler and multiplier that brings tourists, investors and commerce through the city. Dubai will never be in a position to substantially bail out EK because any hit to EK means a simultaneous and amplified hit to Dubai Inc.

There's an obvious way out.

1) Merge EY and EK.
2) Centralize at DWC.
3) Build rail transit to Dubai and Abu Dhabi.
4) Close DXB and use the freed up real estate for other purposes.

Now let's see if the Al-Maktoums can swallow their pride and save their emirate.


Your ideas are the only solution for the UAE - one single Flagship Carrier.

But given the Arabic Culture overall, only when the Al-Maktoums find a good... let's say... excuse, they will not do it.

Same as the blockade on GCC - this is over and well past overdue but it does not ends because nobody wants to take the bitter (humble...) pill...
 
Toinou
Posts: 285
Joined: Sun Apr 14, 2019 8:21 am

Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 9:54 am

Insertnamehere wrote:
Dubai wouldn't be the huge city it is today without EK as it has artificially created Dubai into an international destination. The Emirate of Dubai and the entire UAE will bankroll just about anything to ensure the airline can stay afloat.

I mostly agree. But in all fairness, while EK probably was a huge part of what bring Dubai where it is now, a good part of the start (and still a good source of revenue for many years) was with another kind of transport: Jebel Ali port (and the associate industries) that acted as a logistical hub for the whole region, including some discreet transactions helped by not cautious authorities (which allowed, for example, many transactions with Iran). And this part is not going the right side either: there is much more concurrence than before (Oman, Qatar...) and Dubai is not as neutral as it used to be (because of the influence of Abu Dhabi, itself because of Saudi Arabia) which means which makes it less useful for some kind of business that were not an insignificant part of what was done there.
 
TObound
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 11:53 am

Jomar777 wrote:
TObound wrote:
EK bankrolls Dubai. Despite everyone thinking it's the other way around, EK is a profit centre for the Government of Dubai. And more importantly an economic enabler and multiplier that brings tourists, investors and commerce through the city. Dubai will never be in a position to substantially bail out EK because any hit to EK means a simultaneous and amplified hit to Dubai Inc.

There's an obvious way out.

1) Merge EY and EK.
2) Centralize at DWC.
3) Build rail transit to Dubai and Abu Dhabi.
4) Close DXB and use the freed up real estate for other purposes.

Now let's see if the Al-Maktoums can swallow their pride and save their emirate.


Your ideas are the only solution for the UAE - one single Flagship Carrier.

But given the Arabic Culture overall, only when the Al-Maktoums find a good... let's say... excuse, they will not do it.

Same as the blockade on GCC - this is over and well past overdue but it does not ends because nobody wants to take the bitter (humble...) pill...


I see it happening. The longer the Covid 19 crisis goes on, the worse it is for EK. And let's be clear, the Al-Maktoums can't afford to bail out EK and every other Dubai Inc. conglomerate. And bailouts will be needed. The Covid 19 crisis is going to be hitting aviation and tourism long after North America and Europe return to work. So every day that passes this gets closer to an existential crisis for Dubai.

The sooner the Al-Maktoums cut a deal with the Al-Nahyans, the better the deal they will get. Also, centralizing at DWC is the only way to free up all that real estate at DXB to help them get rich again.

Oh. And let's not forget that there are non-Gulf threats waiting in the wings. From, the new IST and TK to the new Mumbai airport and increasingly direct flights bypassing the Gulf. They can come out stronger or weaker from the crisis.
 
TObound
Posts: 783
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 12:15 pm

Revelation wrote:
TObound wrote:
EK bankrolls Dubai. Despite everyone thinking it's the other way around, EK is a profit centre for the Government of Dubai. And more importantly an economic enabler and multiplier that brings tourists, investors and commerce through the city. Dubai will never be in a position to substantially bail out EK because any hit to EK means a simultaneous and amplified hit to Dubai Inc.

There's an obvious way out.

1) Merge EY and EK.
2) Centralize at DWC.
3) Build rail transit to Dubai and Abu Dhabi.
4) Close DXB and use the freed up real estate for other purposes.

Now let's see if the Al-Maktoums can swallow their pride and save their emirate.

It's kind of interesting that your path to redemption involves having the emirs swallow their pride, meanwhile those emirs took money away from building out DWC to fund Dubai Expo 2020 said to cost $33B USD / 121B AED ( ref: https://lovindubai.com/expo-2020/expo-p ... l-cost/amp ) which was all about building up their pride.

It's interesting how this site has so many proposals that make sense logically but are totally opposite of the actions of the people making the decisions.


Pre-Covid the decision would not have been entirely insensible. Business was booming. Their strategy of promoting Dubai was working. And they had to stay ahead of the (other Gulf states) pack. Post-Covid, the party is over. They don't have any other real options. A year from now, how many destinations will they really be able to serve. And what subset of those will be profitable with such massive aircraft? And given how much more damaging this will be to the developing world, it will be a long time before many of their Asia and Africa destinations rebound entirely.

Also, the Al-Nahyans are more incentivized to cooperate than scalp as they have in the past. They just got a glimpse of what the end of the oil era could look like. Being smug isn't going to serve them well here. Their long term survival depends very much on the success of Dubai.
 
Toinou
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 2:39 pm

TObound wrote:
The sooner the Al-Maktoums cut a deal with the Al-Nahyans, the better the deal they will get. Also, centralizing at DWC is the only way to free up all that real estate at DXB to help them get rich again.

I'm not sure this would really be a smart move: real estate was already in trouble before that crisis in Dubai with way too much offer for a very sleek demand. It was already a classical case of construction-led growth that can't stop itself when it's working for nothing. There was something that had to crash and it was set to be nasty, with this situation, it may get catastrophic.
 
TObound
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 3:33 pm

Toinou wrote:
TObound wrote:
The sooner the Al-Maktoums cut a deal with the Al-Nahyans, the better the deal they will get. Also, centralizing at DWC is the only way to free up all that real estate at DXB to help them get rich again.

I'm not sure this would really be a smart move: real estate was already in trouble before that crisis in Dubai with way too much offer for a very sleek demand. It was already a classical case of construction-led growth that can't stop itself when it's working for nothing. There was something that had to crash and it was set to be nasty, with this situation, it may get catastrophic.


I'm not referring to selling the real estate per se. DXB is a massive chunk of land right in the middle of the city. They could build a whole financial or industrial district there.

The location made sense decades ago when it was far out of town. Today? Not so much. And that is what creates an opportunity for a mutually beneficial deal of sorts. The Al-Nahyans save EK and DWC and turn them into truly national assets. The Al-Maktoums free up a ton of real estate that they can develop, which avoids them and their emirate from going broke.
 
CALMSP
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 4:23 pm

EK has announced all cargo ops at DXB for the interim.
 
Toinou
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 4:30 pm

TObound wrote:
Toinou wrote:
TObound wrote:
The sooner the Al-Maktoums cut a deal with the Al-Nahyans, the better the deal they will get. Also, centralizing at DWC is the only way to free up all that real estate at DXB to help them get rich again.

I'm not sure this would really be a smart move: real estate was already in trouble before that crisis in Dubai with way too much offer for a very sleek demand. It was already a classical case of construction-led growth that can't stop itself when it's working for nothing. There was something that had to crash and it was set to be nasty, with this situation, it may get catastrophic.


I'm not referring to selling the real estate per se. DXB is a massive chunk of land right in the middle of the city. They could build a whole financial or industrial district there.

The location made sense decades ago when it was far out of town. Today? Not so much. And that is what creates an opportunity for a mutually beneficial deal of sorts. The Al-Nahyans save EK and DWC and turn them into truly national assets. The Al-Maktoums free up a ton of real estate that they can develop, which avoids them and their emirate from going broke.


I still don't get how you can make money out of development, even in a very well placed place, if you are in a situation of huge (and probably lasting) economical downturn and if your market is already over-developped. It could be an opportunity for a long-term very optimistic bet but I'm not sure that even the Al-Nahyans are ready for that.
 
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Revelation
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Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 5:10 pm

TObound wrote:
Pre-Covid the decision would not have been entirely insensible. Business was booming. Their strategy of promoting Dubai was working. And they had to stay ahead of the (other Gulf states) pack. Post-Covid, the party is over. They don't have any other real options. A year from now, how many destinations will they really be able to serve. And what subset of those will be profitable with such massive aircraft? And given how much more damaging this will be to the developing world, it will be a long time before many of their Asia and Africa destinations rebound entirely.

Also, the Al-Nahyans are more incentivized to cooperate than scalp as they have in the past. They just got a glimpse of what the end of the oil era could look like. Being smug isn't going to serve them well here. Their long term survival depends very much on the success of Dubai.

The tide was already turning pre-covid. EK was seeing declining load factors and feeling regional and international competition. STC's grandiose A380 fleet plan came to a grinding halt, A359 and 789 were ordered. STC's successor was named. DWC funding was halted while money was redirected towards Dubai Expo presumably because good PR was needed. Real estate was in over supply.

This "DWC as regional airport" thing has been kicked around a lot here, but I have yet to hear any of the principals (i.e. the Emirs) mention it. It seems to be a creation of bloggers and social media mavens. It would involve a MASSIVE amount of spending to build out the airport and add necessary ground transportation links, and as above DWC funding had already been shut down in favor of glamour projects such as Dubai Expo. I thought someone here did an estimate of what it would cost to deliver the needed high speed rail links to the city centers and it made the eyes water. I have a hard time seeing one Emir help the other Emir get a bigger airport than their own and end up depending on that Emir to keep vital air service available. I just don't see the appetite for so much spending on a pure infrastructure project.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
Jomar777
Posts: 562
Joined: Tue Oct 20, 2015 8:45 am

Re: Emirates seeking loans on top of government bailout

Wed Apr 08, 2020 8:10 pm

TObound wrote:
Jomar777 wrote:
TObound wrote:
EK bankrolls Dubai. Despite everyone thinking it's the other way around, EK is a profit centre for the Government of Dubai. And more importantly an economic enabler and multiplier that brings tourists, investors and commerce through the city. Dubai will never be in a position to substantially bail out EK because any hit to EK means a simultaneous and amplified hit to Dubai Inc.

There's an obvious way out.

1) Merge EY and EK.
2) Centralize at DWC.
3) Build rail transit to Dubai and Abu Dhabi.
4) Close DXB and use the freed up real estate for other purposes.

Now let's see if the Al-Maktoums can swallow their pride and save their emirate.


Your ideas are the only solution for the UAE - one single Flagship Carrier.

But given the Arabic Culture overall, only when the Al-Maktoums find a good... let's say... excuse, they will not do it.

Same as the blockade on GCC - this is over and well past overdue but it does not ends because nobody wants to take the bitter (humble...) pill...


I see it happening. The longer the Covid 19 crisis goes on, the worse it is for EK. And let's be clear, the Al-Maktoums can't afford to bail out EK and every other Dubai Inc. conglomerate. And bailouts will be needed. The Covid 19 crisis is going to be hitting aviation and tourism long after North America and Europe return to work. So every day that passes this gets closer to an existential crisis for Dubai.

The sooner the Al-Maktoums cut a deal with the Al-Nahyans, the better the deal they will get. Also, centralizing at DWC is the only way to free up all that real estate at DXB to help them get rich again.

Oh. And let's not forget that there are non-Gulf threats waiting in the wings. From, the new IST and TK to the new Mumbai airport and increasingly direct flights bypassing the Gulf. They can come out stronger or weaker from the crisis.


I am not sure actually. Do not rule out but wonder why it has not happened before... With the blockade, the amount of flights which were shelved by both EK and EY was significant. Those are rich countries (UAE, KSA, Kuwait, Oman and Qatar...) but the Qataris are the ones that like to splash cash and Dubai (most of all...) miss them (their cash, that is...).

Now, with COVID19, with the need to actually make DWC work (it is ready but I simply do not understand why they have not at least moved some EK flights there...), with EY really in a bad way...

To bail EK out now, it will be to admit that the company is really struggling. I believe that something with a headline as "Major Consolidation", "Air Optimization", etc etc will be needed as well as a full review of their orders (EK and EY) with both Boeing and Airbus implying on a reduction of their assets... hat's a lot for them to take
 
Gbass21
Posts: 32
Joined: Sat Feb 10, 2018 8:01 pm

A380: what would Emirates do?

Sat Apr 25, 2020 7:23 pm

Hi guys, I was searching threads about EK and their massive A380 fleet but couldn´t find anything about it related with this worlwide covid crisis. I want to know what would yo do if you were emirates with their a380 fleet. Currently they have 115 A380, 132 77W operating. And 115 77X on order. I think that the economy would take years to recover. In fact, we even have started to recover. I think emirates would need to retire lots of A380 until they reach to about a fleet of 30~40 frames to operate routes like JFK, LHR, SYD, PVG, HKG, LAX, MEL, NRT,CDG, FRA, SIN and maybe a few others. Furthermore, I think that the rest of ther A380 destiantions could be operated by 77W easily. And talking about their 77W they would need to retire some of them and add to the fleet some 789 for routes where 77W is too much capacity. The big problem is the 77X fleet; I have some thoughts about it. With current oil prices definetly they don't need more efficient planes and their 77W is extremely young so I would reduce the 779 order to less than 30 frames. Evenmore, the one that now a I see a future is the 778 (yes, is crazy) but as we have seen, cargo demand is booming and probably, it could raise as time past. Having an 77W capacity aircraft with longer range and more cargo capacity could be extremely interesting for an airline that connects the world from their massive hub. Routes like AKL, LAX, SFO, SYD, DFW, IAH, GRU could take advantage of the extra payload capacity and maybe adding nonstop to MEX could only be possible with 778 frames. In fact we have seen rumours about LH wanting to convert some 77X to 77F because oh that raise of cargo demand. So what do you guys think or what would you do?
 
xwb777
Posts: 908
Joined: Wed Jan 17, 2018 4:13 pm

Re: A380: what would Emirates do?

Sat Apr 25, 2020 7:33 pm

I would say, lets wait and see if they gonna do anthing regarding their A350, B779 and B789 order. I think that they wont be reducing them as they will be starting to arrive in 2023.

According to airlineroute listing, Emirates will be resuming their normal A380 & B777 operations once they get the approval from the GCAA which is expected by July. Their operations will restart in phases. Some destinations over the summer will be upgauged to the A380.

People will want to fly once the global travel ban is lifted.


Sent from my iPhone using Tapatalk
 
Scotron12
Posts: 496
Joined: Fri Mar 01, 2019 2:13 pm

Re: A380: what would Emirates do?

Sat Apr 25, 2020 8:00 pm

I know GLA is provisionally scheduled with an A380 and 77W for July. EDI will start 77W in August. Of course, all this is subject to change.

They had pre-Covid 9 x A380s daily from London (6 ex-LHR & 3 ex-LGW) plus 3 x A380s from MAN.

I cannot see their full schedule resuming for quite a while.
 
blueflyer
Posts: 4352
Joined: Tue Jan 31, 2006 4:17 am

Re: A380: what would Emirates do?

Sat Apr 25, 2020 8:13 pm

It is too early to tell given the number of permutations possible, even for a carrier such as Emirates. They will obviously make plans based on forward bookings, but they also know that a portion of these bookings made before the crisis occurred will be canceled, while other passengers are waiting out the downward slope before making their reservations. There is a high degree of uncertainty in any demand forecast.

A route previously served by 4 daily A380s may go down to 2 or 3 A380s instead, however that doesn't automatically mean that the freed up A380s all get parked though. It is quite possible that another route that was previously served by 2 or 3 777s will be consolidated into a single A380. Then these 777s could be used to to cut capacity on single-daily A380 routes. Bottom line, there's no doubt the A380 fleet will shrink, but predicting by how much and which route will be affected how is nothing more than guesswork at this stage.
 
fessor
Posts: 165
Joined: Tue Jun 03, 2014 1:26 pm

Re: A380: what would Emirates do?

Sat Apr 25, 2020 8:13 pm

I hope to see the A380 in CPH
 
emiratesdriver
Posts: 294
Joined: Tue Dec 27, 2016 9:04 pm

Re: A380: what would Emirates do?

Sat Apr 25, 2020 9:15 pm

The current plan is at least 60% of the fleet won’t be flying for at least 12 months if at all, plans have been drafted too stockpile consumable and critical parts off these airframes.
 
L0VE2FLY
Posts: 1012
Joined: Wed Dec 12, 2012 10:54 pm

Re: A380: what would Emirates do?

Sat Apr 25, 2020 10:50 pm

Why are you ignoring Airbus?! EK has 50 A359s & 30 789s on order, on some routes the A359 would make a better 77W replacement than a 789. I haven't flown EK in years but if I did in the future I'd much rather be on an A350 than a 787, the latter's dimmable windows make it an awful choice for the true avgeek, if you're okay with the crew dimming your window against your will while you're enjoying the view, I'm NOT!
 
JayinKitsap
Posts: 2253
Joined: Sat Nov 26, 2005 9:55 am

Re: A380: what would Emirates do?

Sat Apr 25, 2020 11:06 pm

Like every airline, EK has experienced almost 2 months of dismal revenue, with 2-3 month more before anything picks up. July 1 there will be 25% or less of the fleet flying. The 77W will likely be the first to go back in the air, with low yields the belly can be chock full of cargo helping with revenue. By October 1, it will still be less than 50% of the fleet, but somewhere around that point certain routes will have some A380 return. It could be 18 to 24 months before EK has 50 A380's back in service, at that time the 77W will be 2/3 back in service. Slow, painful, and huge losses in the forcast.

As the other airlines, EK will be quite picky on acceptance of any plane at this point, in particular the last A380's off the line. Deferrals of at least a year, with some 779's coming that are in the pipeline but the last 779 will come more than 5 years after the current plan. EK's planes that are on lease will not be renewed unless they get bargain pricing. The 787 and 359's will get deferred by 3+ years also. As long as gas is cheap, it isn't bad flying the 77W, but the lack of cargo space will hurt the A380 unless they somehow can get yields over 70%, which will be tricky in a soft market.
 
LH658
Posts: 1203
Joined: Thu Oct 13, 2016 7:35 am

Re: A380: what would Emirates do?

Sat Apr 25, 2020 11:58 pm

Hope they keep the A380 on the IAH flight.
 
Arion640
Posts: 3076
Joined: Fri Mar 31, 2017 5:15 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 1:15 am

Who knows. If the A380 has to go it has to go (but at least 30-40 would remain which is still loads compared to other operators). Emirates whatever happens, will survive.
 
User avatar
chunhimlai
Posts: 609
Joined: Wed Jun 03, 2015 11:03 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 1:31 am

Build DWC asap and EK can switch to smaller aircraft
 
User avatar
FrenchPotatoEye
Posts: 355
Joined: Sun Nov 12, 2017 1:20 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 2:45 am

Dont first EK A380s ended the leases sometime this year in 2020?

Maybe the a380 fleet will natural shrink?
 
emiratesdriver
Posts: 294
Joined: Tue Dec 27, 2016 9:04 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 3:17 am

FrenchPotatoEye wrote:
Dont first EK A380s ended the leases sometime this year in 2020?

Maybe the a380 fleet will natural shrink?


That will be how it’s potentially “spun” however spares like MLG, flaps, actuators and fuel pumps will be removed as suitable airframes enter “deep” maintenance from where they will never return.
Alternatively they might become another attraction at the Dubai 2020 expo :laughing:
 
Toinou
Posts: 285
Joined: Sun Apr 14, 2019 8:21 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 7:13 am

xwb777 wrote:
People will want to fly once the global travel ban is lifted.

I'm not sure this is so simple.
Many people will obviously want (or have) to travel. Some because they need it to work, some because they have family abroad they will want to see, some because they like to travel and have had to refrain for some time.
But many people will not want to fly , either at the moment or more definitively. Some people may stay scarred of being confined with many people in a closed space (I'm not saying this is a place where contamination (with any disease) can happen more easily, just that some people will think it's the case). Some people may have less money to travel as the economy will probably shrink (to what level, I have no idea and no one really has). In business, companies or already realizing that some said for years : not all travel are so indispensable that they used to think ; in some cases, you have to be there in person (for example, if you have to realize a manual work that no one else can do), but in many other cases, a phone or video call is (almost) as efficient and allows you to space time and money. Some people will want to change some aspects of how they consume produces and services (and tourism is one of them), many reasons are involved, environment being one of them (I can't say about elsewhere in the world but in western Europe, it still seems to be an important question at the moment).
The latter aspects may affect travel demand more permanently I guess, as it may some people not want to fly anymore or at least want them to fly less.

For all this reasons, I would venture predicting what future demand for travel will be. So-called economists trying to predict what future will be are making at best educated guesses (and in the worst cases, it's pure ideology).
 
lalib
Posts: 115
Joined: Wed Feb 10, 2010 8:48 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 11:10 am

I agree with Toinou.
There will be a reluctance to fly.

EK got a huge fleet that will be under utilsed. I'm no expert but perhaps EK should consider taking equity stakes in struggling airlines or state owned airlines such as MH, TG, PK, PL, Biman, UL, SAA. If these airlines are on the verge of collapse EK can deploy their a/c retire the existing planes of the struggling airlines and utilse EKs infrastructure to run them.

I know this is not easy especially since travel demand will still be low and such strategies have failed in the past.
 
MIflyer12
Posts: 8256
Joined: Mon Feb 18, 2013 11:58 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 11:46 am

L0VE2FLY wrote:
Why are you ignoring Airbus?! EK has 50 A359s & 30 789s on order...


Do you think spending $20 Billion on new aircraft by a firm that has no or severely diminished revenues is the obvious fix?

If any big carrier is in a pickle due to lack of fleet flexibility (high trip costs), it's Emirates.
 
User avatar
flee
Posts: 1313
Joined: Mon Oct 12, 2009 8:14 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 12:09 pm

lalib wrote:
I agree with Toinou.
There will be a reluctance to fly.

EK got a huge fleet that will be under utilsed. I'm no expert but perhaps EK should consider taking equity stakes in struggling airlines or state owned airlines such as MH, TG, PK, PL, Biman, UL, SAA. If these airlines are on the verge of collapse EK can deploy their a/c retire the existing planes of the struggling airlines and utilse EKs infrastructure to run them.

I know this is not easy especially since travel demand will still be low and such strategies have failed in the past.

That is too messy - why not just buy their surplus aircraft at firesale prices?

EK can return all the A380s as an when the leases expire and plan for a future without VLAs.
 
User avatar
cathay747
Posts: 1500
Joined: Sun Nov 23, 2003 8:47 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 2:32 pm

Toinou wrote:
xwb777 wrote:
People will want to fly once the global travel ban is lifted.

I'm not sure this is so simple.
Many people will obviously want (or have) to travel. Some because they need it to work, some because they have family abroad they will want to see, some because they like to travel and have had to refrain for some time.
But many people will not want to fly , either at the moment or more definitively. Some people may stay scarred of being confined with many people in a closed space (I'm not saying this is a place where contamination (with any disease) can happen more easily, just that some people will think it's the case). Some people may have less money to travel as the economy will probably shrink (to what level, I have no idea and no one really has). In business, companies or already realizing that some said for years : not all travel are so indispensable that they used to think ; in some cases, you have to be there in person (for example, if you have to realize a manual work that no one else can do), but in many other cases, a phone or video call is (almost) as efficient and allows you to space time and money. Some people will want to change some aspects of how they consume produces and services (and tourism is one of them), many reasons are involved, environment being one of them (I can't say about elsewhere in the world but in western Europe, it still seems to be an important question at the moment).
The latter aspects may affect travel demand more permanently I guess, as it may some people not want to fly anymore or at least want them to fly less.

For all this reasons, I would venture predicting what future demand for travel will be. So-called economists trying to predict what future will be are making at best educated guesses (and in the worst cases, it's pure ideology).


I agree with you. I feel lots of people are seriously over-estimating any recovery for airlines with way too much talk about how "people will want to travel"...people in Hell want ice-water too. As to the OP's original question...if I were EK, with that huge A380 fleet, I'd be soiling my trousers right about now. (Of course, I would never have ordered so many of the damned things in the first place, but that's another discussion!)
Try a Little VC-10derness
 
lalib
Posts: 115
Joined: Wed Feb 10, 2010 8:48 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 3:30 pm

flee wrote:
lalib wrote:
I agree with Toinou.
There will be a reluctance to fly.

EK got a huge fleet that will be under utilsed. I'm no expert but perhaps EK should consider taking equity stakes in struggling airlines or state owned airlines such as MH, TG, PK, PL, Biman, UL, SAA. If these airlines are on the verge of collapse EK can deploy their a/c retire the existing planes of the struggling airlines and utilse EKs infrastructure to run them.

I know this is not easy especially since travel demand will still be low and such strategies have failed in the past.

That is too messy - why not just buy their surplus aircraft at firesale prices?

EK can return all the A380s as an when the leases expire and plan for a future without VLAs.


Better option no doubt.
 
User avatar
Revelation
Posts: 24589
Joined: Wed Feb 09, 2005 9:37 pm

Re: A380: what would Emirates do?

Sun Apr 26, 2020 4:21 pm

chunhimlai wrote:
Build DWC asap and EK can switch to smaller aircraft

Who will pay? Those in charge already decided Dubai Expo is more important.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
NWADTWE16
Posts: 717
Joined: Fri Jun 29, 2012 5:12 am

Re: A380: what would Emirates do?

Sun Apr 26, 2020 5:59 pm

Gbass21 wrote:
With current oil prices definetly they don't need more efficient planes



Hey, hello. Wake up mate!! Humanity will not survive on Earth if we continue the same mindsets of those prior to us. Burning even 1/100th of what we have discovered will seal our fate. Other than this statement, you sound like a young person, so I will strongly encourage that you steer that aviation passion toward a mindset (even contribution?) that future travel will be using less and less until zero of carbon burning fuels. This is opposed to the 1980's destroy it all mindset where "hey its cheap, so who cares about anything else" and is a big reason why we are hurling toward the tipping point. All the cheap Oil and Gas in the world will not save anyone, its a dying, hopefully dead (thanks to covid) commodity.

Humanity sadly does require giant smacks to the face before reacting properly and so I see this entire thing as a positive sign for the most important thing to all us. #ThereisNOplanetB

and FYI I might be the largest A380 lover on this forum, and have been drenched in Glycol, sniffing JetA since the 80's/90's. This is just the reality now. I am sure this will get flamed by others but hopefully you realize how horrible that comment is
I haven't been everywhere, but it's on my list!
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