Emirates is in talks to raise billions of dollars in loans, on top of Dubai’s state bailout for the world’s largest long-haul airline carrier, as the coronavirus pandemic grounds flights.
The carrier is reaching out to local and international banks about the funding that will be in addition to the undisclosed amount of financial aid from the government, according to people with knowledge of the matter, who asked not to be identified because the information is private.
One of the options being discussed are bilateral loans, which are cheaper, can be agreed quickly and done in smaller tranches compared with syndicated facilities, the people said. No final decisions about the borrowing have been made, they said.
A spokesperson for the Dubai-owned Emirates declined to comment.
Emirates — an emblem of Dubai’s meteoric rise in the last three decades from a desert outpost into a global business and tourism hub — is being particularly hard hit by the abrupt collapse in air travel as countries lockdown to slow the spread of the virus. The government last week said it would step in to shield the airline with new equity.
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The airline is the largest of the major Middle East carriers, which also include Qatar Airways QCSC and Etihad Airways PJSC. All three are state-owned, giving them a potential advantage in swiftly securing bailout packages. Emirates, whose fleet consists of all wide-body aircraft, typically operates more than 500 flights a day.
The International Air Transport Association, which represents 290 airlines around the world, estimates the industry may suffer more than $250 billion in lost revenue this year.