On Tuesday, the president of carrier Emirates stated that an initial public offering of stock in the Dubai-based airline could take place as the city-state attempts to boost its local commercial market while ensuring its fleet of iconic double-decker jumbo jets soon hit the skies again.
European plane-maker Airbus meanwhile collected more orders on the third day of the Dubai Air Show, reaching an agreement worth over $3.3 billion to retail 28 latest aircraft to Kuwait’s Jazeera Airways. Chicago-based manufacturer Boeing Co. has yet to declare an influential sale at a show crucial for the Mideast’s East-West travel hubs.
Tim Clark of state-owned Emirates informed reporters at the aviation show that a plan to sell portions of Emirates “is out there” after his boss, Emirates chairman Sheikh Ahmed bin Saeed Al Maktoum, commented on the possibility.
The city-state this month declared plans to record its state-owned electricity company and other government-backed firms to increase liquidity and develop the local Dubai Financial Market so it can contend with more significant equivalents in the region. In recent months, the market has also seen powerful opponents go private, and a fraud probe targeted one primary real estate developer registered in Dubai.
Since the pandemic hit, Emirates floored dozens of its iconic Airbus A380 double-decker jets, many apparent from the tarmac at Dubai Air Show. The carrier flashed through $7.1 billion over the past year and a half, forcing it to take nearly $3.8 billion in cash aid from Dubai’s government.
Regaining its 120 A380s to the skies is core to Emirates’ compensation, and Clark said the airline must maintain its debt. He was candid about the planes’ benefit to Emirates, saying that 80% of the carrier’s profitability arrived from the aircraft before the pandemic.
“To have a $450 million aircraft sitting on the ground doing nothing for two years is a challenge,” he said, adding, “When the borders are open to us again, there’s absolutely no reason why we should not be expanding. … Once we get back to where we were, we will then grow again.”
The business show in Dubai typically sees a range of orders and product specifications. But this year’s exhibition, in the darkness of the COVID-19 pandemic that triggered the aviation industry’s worst-ever crisis, has been more subdued. Most transactions have involved small aircraft instead of the trademark wide-bodies that ply the long-haul routes of Gulf Arab carriers.
Airbus’ most notable sale of the day involved 20 single-aisle A320neos and eight A321neos, which clashes immediately with Boeing’s 737 Max, along with an opportunity to market another five planes to Kuwait’s low-cost, fast-growing airline.
While officials called the deal as a memorandum of compromise rather than a firm order, Rohit Ramachandran, CEO of Jazeera Airways, said he contemplated the handshake “too far exceed any immediate formal collateral” behind the agreement. “There’s a great level of trust to which honestly one could ascribe a significant dollar value,” Ramachandran said.
Airbus also said it secured an assortment of 10 narrow-body A220 jets from Nigeria’s Ibom Air, a unique carrier owned by the oil-rich southeast state of Akwa Ibom. Based on the plane maker’s pre-pandemic price list, the deal is worth around $810 million. Executives refused to state how much they were spending on the planes.
The announcements trailed Airbus’ other orders over the show’s first two days, with 111 new aircraft sold to the Air Lease Corporation and 255 new aircraft to Indigo Partners’ multiple low-cost carriers. The purchases signal officials see the damaged industry healing from the pandemic, with the need for travel set to grow in the following years.
The trade show typically pits French Airbus and its American rival Boeing, the two companies at the top of the supply chain, against each other in the critical Mideast market filled with long-haul carriers connecting East and West.