Tim Clark, the President of Emirates Airlines, said on Wednesday that the company may need to raise more liquidity, potentially through another capital injection from the Dubai government if air travel demand does not recover soon. The state-owned carrier had hoped that the global vaccination campaigns would restore confidence in travel, but air travel demand remains significantly low, prompting many airlines to suspend their flights or operate them nearly empty.
Clark stated, "Our liquidity has been good for six, seven, or eight months. We have sufficient liquidity to continue daily operations on a neutral basis." He added, "But like others, if global travel demand remains as it is today in six months, we will all face problems. It’s not just Emirates."
The airline, which incurred losses of 12.6 billion dirhams (3.4 billion dollars) in the first half of the year, received two billion dollars from the Dubai government, its sole shareholder, in the form of equity. Clark mentioned that the company would recommend to the government regarding raising liquidity without specifying a specific timeline. He noted that the recommendation could be for an equity injection or borrowing, or other measures without detailing them, stating, "The balance sheet is strong regardless of what happened."
However, Clark indicated that the liquidity situation could improve by September-October if demand improves, adding that he hopes the airline will not need to seek liquidity. Emirates Airlines has resumed flights with all its Boeing 777 aircraft, numbering 151, which primarily carry cargo, currently transporting between 20,000 and 30,000 passengers daily.
Clark mentioned that the company might retain some older Boeing 777 aircraft that are scheduled for retirement and convert them to cargo-only planes, as demand for freight remains high. He expressed expectations for business class travel demand to return post-pandemic, even if corporate travel continues to decline as executives tend toward virtual meetings instead of traveling. He added that lower prices for business class could be supported by demand if corporate travel does not recover.
Clark, who was scheduled to retire last year, expressed his desire to put the airline on a path for the future before his retirement but noted that he no longer knows when he will step down from his position.
