In a move analysts say could open up Emirates Airline to more foreign investment, Dubai transferred control of the state carrier to the Investment Corporation of Dubai (ICD).
"The transfer does not affect our management structure, nor any of our contracts with employees, suppliers or other third parties," Emirates said in a statement. "It is business as usual. Emirates Group companies continue to be wholly owned by the government, although now indirectly through the Investment Corporation of Dubai."
Established in 2006, the ICD is an independent administrative agency whose role is to better manage Dubai state companies and to encourage global investments in Dubai and the businesses it owns. The ICD also is seen as the government’s tool to help privatize companies or lure more global investors to offset risk.
As a state company, Emirates already was part of the ICD stable. But the transfer puts the airlines more squarely under ICD supervision and would make it easier for the agency to make decisions on the airline’s financial structure, such as opening it up to foreign investors.
Darin Lee, an aviation expert for consultant LECG, said the transfer could be the first step toward spinning off the company in an initial public offering to raise cash, which Dubai sorely needs.
Dubai has been seeking loans from the United Arab Emirates as the global recession has dried up the international sources of capital and investment that have fueled its economic growth over the past decade. The decline in real estate and stock markets and steep drop in oil prices have burst the Dubai growth bubble.
Abu Dhabi, another emirate, reportedly has been looking to invest more in Dubai national assets, especially Emirates, which is estimated to be worth more than $10 billion.