Middle East region set to rebound slower than any other, according to IATA
Emirates may need to look at raising more cash in 2021, potentially from the government, if air travel demand fails to improve soon, President Sir Tim Clark has said.
Speaking at the World Aviation Festival online, Sir Tim said that Emirates’ balance sheet is “pretty strong” and that the airline has enough cash to last for around six to eight months “to be able to keep the day-to-day operation at a neutral basis”.
But he said the whole airline industry will face “difficulties” if in six months global demand remains at where it is today.
The International Air Transport Association (IATA) said on Wednesday that the Middle East region is likely to see the slowest demand rebound of any in the world. Demand in the region in 2021 is forecast to be nearly 67 percent lower than 2019.
Sate-owned Emirates received around $2 billion in equity in 2020 from Dubai’s government after the airline lost $3.4 billion (12.6 billion dirhams) in the first half of the year due to the pandemic.
Sir Tim said if traffic remains subdued Emirates “will make the recommendations to the government as where to go with regards to raising more cash”, without specifying exactly how the cash would be raised. It could be through another equity injection, for the airline to raise debt or to take other measures.
Sir Tim added that he hoped Emirates would not have to raise any more cash and said that things could improve by around September or October providing demand improves.
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