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The Dubai government is considering selling shares in one of its flagship assets, Emirates Airline, in the latest stage of a privatisation push that is quickly gathering momentum.
At the start of November, the authorities in the city-state – which forms part of the United Arab Emirates – said they planned to list shares in 10 companies on the local Dubai Financial Market (DFM). That was part of an effort to reinvigorate the bourse, which has been increasingly overshadowed by rival exchanges in Abu Dhabi and Saudi Arabia.
The first companies named as candidates for an initial public offering were local utility the Dubai Electricity and Water Authority (Dewa) and the Salik road toll system. A listing of Emirates Airline would be likely to attract far more interest than either of those businesses, given its position as one of the world’s largest international carriers.
Speaking to Reuters on 29 November, Emirates Airline president Tim Clark confirmed that his company was now being lined up for a potential stock market listing, although there is not yet any indication as to when that might happen or how many shares might be sold.
“Yes, there has been talk about it. Yes, there has been, perhaps a little bit more flesh on the whole subject than there has been in the past,” he said.
“I’m waiting [for] instructions as to how this is going to affect the Emirates Group. What the government of Dubai decides to do…is up to them.”
The airline has received more than $3 billion in support from the Dubai government to help it through the Covid-19 crisis, which saw international aviation come to an almost complete halt.
The airline posted a loss of $6bn for the year to the end of March 2021 as a result of the pandemic. Clark told Reuters that it would report another loss for the current year, although it would be smaller than last year and he expected to break even or make a profit next year. “We have returned to profitability already, over the last six, seven weeks, we’ve been profitable,” he said.
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However, the newly identified Omicron variant of Covid-19 could yet undermine hopes of a recovery in the aviation sector. It could also delay plans for any listing of the airline’s shares, until the outlook for the sector is clearer.