Emirates the prize in cash bailout discussions

It is understood that a sale of major state assets to Abu Dhabi is one of the options and that Emirates Airlines is top of the list.

The airline is valued  at around $10 billion and HH Sheikh Ahmed bin Saeed al Maktoum, chairman of Emirates hinted at a forum ahead of the Dubai Air Show last month that the airline was looking at a possible flotation of up to 25% of the airline's stock which is currently held by the Government of Dubai.

This is not the first time that there has been speculation about Abu Dhabi taking an interest in the airline and early in first wave of the credit crunch rumours were rife that Abi Dhabi was demanding a stake in exchange for support funding.

The fast-growing airline, has been the envy of neighbouring Arab states since its meteoric growth into a major world player. The proposal is controversial as the airline is seen as an important symbol of the emirate’s identity. 

Although other Gulf states are thought to be monitoring the situation, Abu Dhabi is believed to be keen to offer Dubai a deal that keeps the airline within the United Arab Emirates. Abu Dhabi banks are the major creditors in loans to Dubai World the government owned operation that manages Dubai investments.

Emirates airline has continued to remain profitable during the financial crisis and last year the airline enjoyed profits of $690million tghanks to careful cost control. The airline has also revised its delivery schedule for flagship Airbus A380 aircraft of which it is the largest customer in the world with 57 aircraft planned for its fleet. According to sources at the Dubai Airshow the airline has pushed back fleet expansion and will not receive any of the superjumbos for almost a year after the end of 2010.

Emirates will take 15 A380s through next year, then defer for a year.  An Engine Alliance chart showing fleet growth of the GP7200-powered A380 between the first delivery in 2008 and 2012 reveals that from mid-2010, when the Emirates fleet was due to reach 15 units, there are no deliveries for around 10 months. Since the chart was produced, Emirates has revealed that due to production hold-ups its A380 fleet will not reach 15 units until late 2010.