But of course. In an article linked on the site you quoted, they quote some Dubai businessperson saying that "the Government will stand behind its companies".

Well it doesn't: Dubai rejects guarantee for Dubai World

Overall, EK will benefit. The real estate collapse already happened over a year ago. It is being reported now because some of the debt now needs to be refinanced and it is a totally different financial market. Property values already fell 50% and many expats left. Dubai was growing too fast and the infrastructure was bursting at the seams. It was quite usual to be stuck in traffic for hours. Remeber too how bad Terminal 1 was when one always had to be taken by bus to the plane seemingly several kilometers away.

With the metro open and less people plus more affordable real estate, Dubai will become a more livable place again but for residents and vistors. EK will continue to grow because they have a very solid business model. Just look at SFO which just started daily in May of this year and they have already upgaged the route and on many days these past weeks it has been completely sold out.

There are still many markets where EK will do very well against US/European/African/Asian competitors. Dubai itself will require time to get its house in order but EK will do increasing well as it is not solely tied to Dubai.

For the Emirates, I have some severe doubts.
1) They are basically a conglomerate. (Look at their brands page). Heavily travel based but even here. Hotels and airlines really have little to do with each other.
2) Look at note 34 of the F/S. Huge amounts of intercompany transactions. Sales alone were almost $40M. $1B in purchases/services received. More than $1B worth of letters of credit (guarantees I'd assume)
They owe other companies in the group more than $300M USD, about half of which is more than a year old.

Without an overall sightline in the controlling group, no one has a clue how healthy Emirates really is. Are they simply a great company with great mgmt, a weak airline kept upright by direct and indirect subsidies and payments from the parent company, or something in the middle.

Its future will be political. If Abu Dhabi needs to rescue Dubai, one price might be the Emirates merging with EY. But it is all politics.

As I have stated earlier on this thread, I doubt very much whether there will be any sort of merger of EK/EY. Having worked closely with EY in 2004/5 when they were pursuing an aggresive route implementation policy (up until then they had just dabbled in Middle East destinations), I see no political or business sense to consider a merger. The airline was setup to rival EK and I doubt if the political wind has changed since then and Mohamed bin Zayed is fiercely loyal to the Abu Dhabi cause. From the EK standpoint, they have a fantastic global brand and any sort of merger with EY, who are still relatively unknown outside of the Gulf, although that is improving due to exposure in big sporting events, would be a climbdown and a loss of face and we know what significance that has in the Gulf/wider Arab community.

Time will tell if my opinion is right or wrong!

Business sense is likely not a major factor in what will happen with Dubai's Crown corporations. AD has the money, Dubai needs it but Dubai has also explicitly disclaimed any wholesale guarantee of their investment companies.

Things become even murkier as a significant portion (possibly all) of the debt is Islamic compliant - and this will be the first time that the rules will be tested. Given any judicial review will take place under Dubai courts, who happen to be appointed by the ruler of Dubai. Whose companies are involved in the whole mess.

So I agree. Time will tell the tale.

Good to know that you had a great trip and enjoyed your EK experience. But IMHO EK trying harder makes me go http://i45.tinypic.com/jike0y.gif

Found the following images on 4chan ... looks like they are busy putting together the re branding pitch for EK-EY :D

PS-Dont flame me... have a sense of humour

http://i48.tinypic.com/2la3az6.jpg


http://i48.tinypic.com/1620ld4.jpg

Is that the Dubai equivalent of the Wall Street crash????

The only problem with this statement in my experience is consistency - in my F flights this year on EK I would have foregone the one really pleasant flight in order to have consistent service on the others.

Anyway, it's irrelevant whether EK is an excellent airline or not - the better the airline the more it's worth, of course, but if AD is seeking collateral for bailing out Dubai, EK would be one of the few good choices left. Assuming, that is, they don't have it already.

I have also not seen any evidence that EK is in financial difficulty.
Half year profits ending Sept 09 was 752 million dirhams, up 165% on the same period in 2008. There was also an 18% increase in passenger loads.
New routes are still being announced, Durban and Luanda were started in Oct 2009, and Tokyo and Amsterdam have recently been announced.
The number of flights to other destinations are still increasing. In November, extra daily flights to Bangkok and Sydney were announced. Additional flights to Jakarta and Manila were also announced. Over the last week, EK also announced additional flights to Doha and Amman. In February, flights to Rome will increase to double daily. The aircraft type servicing SFO has changed from a 777-200 to a 777-300, increasing the passenger capacity.
So things seem to be going well for the airline even if the real estate sector is struggling. And lets be honest, real estate is struggling all over the world, not only in Dubai. In comparison to other airlines, who have been cutting flights and laying off staff EK seems to be going strong.

Surely a typo. I assume you mean 752 million dirhams:p

As mentioned on a Bloomberg report, the Dubai crisis will be solved with "one Sheik calling another Sheik".

Oops! Yes of course, otherwise there would indeed be a few problems for the airline!!! Thanks for the correction :)

the only find out is a properly made financial report. virgin atlantic also claimed to have made a profit.