Emirates needs bailout “soon” says Clarke

Most of the major airlines are running cargo operations with a few passengers, but Emirates is up to about 40% of its pre-Covid schedules. The problem seems to be that aircraft are far from full, indeed max occupancy seems to be under 60% at the highest with averages around 33%.

On Friday last week IATA issued guidelines and forecasts saying that the return to operations worldwide was 20% down on expectations. A large part of that is driven by the United States, a key driver in world air mobility, being under the grip of a pandemic that just rolls on and a government that mindlessly ignores it.

Emirates is operating around 230 flights a day, but 115 of them are cargo only.

Last week the airline operated 123 777’s and 6 of its 115 A380’s. Paris and London are the main A380 recipients for now, with Toronto next on the list.

The problem, as Sir Tim Clarke outlined, is that bookings have to be high enough to cover the costs, its not even about making a profit, just covering the outlay. Until they can cover the expense of running anything, it won’t be on the fly list.

150 of Emirates destinations have quarantines and travel restrictions applied to them at present. More costs are being felt by all cargo operators into China and other countries as it becomes clear that food packaging and the food itself, is being found to carry the Covid virus. China found 22 cases of contaminated packaging and food just last week, from countries as diverse as Ecuador and the US and UK. New Zealand believes that its latest outbreak was from contaminated packaging.

Clarke said that the ailrine had in fact not done too badly under the circimstances, taking over $2 billion in bookings, mostly for cargo but also passeneger travel.

“113 of those sectors were with passengers; 27 sectors operated by freighter aircraft; 75 sectors by passenger aircraft with belly cargo only, so you’re getting about 30-40t; six sectors operated by passenger aircraft with cargo loaded on seats and in overhead bins; eight sectors operated by passenger aircraft with economy seats removed carrying belly cargo and cabin-floor loaded cargo.

“So we’re stuffing cargo into every bit of volumetric space top and bottom and it’s worked quite well for us,” he said.

While that all seems relatively rosy, the longer term predictions are not so good. The cargo market is slowing. Only the US, South America and South Africa are booming PPE destinations, and US freighter companies mostly cover the domestic need. The PPE crisis is now largely over and masks are easily available to the public in most industrialised societies.

What worries Emirates is 2021, and a bad Christmas in 2020, which would normally be a boom time as European travellers head for relatives and holidays in India, Australia and New Zealand, and the winter hotspots of Bali and Thailand.

Right now 2021 is an open book, but without a vaccine, the roiling ups and downs of Covid infections will place a brake on air travel for a long while to come. And that is why, Emirates will need a bailout “sooner rather than later”.