Emirates Airline has emerged as a possible bargaining chip in Dubai’s attempt to stabilise its debt mountain, reports the Guardian.

Economists at French bank Societe Generale have said Dubai might have to offer Emirates as “collateral” in order to ensure a bailout from neighbour Abu Dhabi.

They suggest this could happen by merging with Abu Dhabi’s Etihad Airways.

Speaking to Bloomberg.com, Vivek Tawadey, head of credit portfolio strategy at BNP Paribas, said:

“It [Emirates] could be on the table. It is one of Dubai’s crown jewels, it has very strong market reputation and it also acts as a hub between Asia, the Middle East and Europe.”

Emirates is owned by the Investment Corporation of Dubai, which is in turn controlled by the Dubai government, as is Dubai World, which is the source of the current financial crisis.

Both airlines have denied any talk of a merger.

Emirates boss Maurice Flanagan, speaking to Bloomberg, said Dubai is unlikely to sell Emirates to help raise funds or to allow a merger, Flanagan said. The company also has no plans to join any of the global airline alliances.

Etihad said there are “no talks” about a deal with Emirates.

Emirates is one of the world’s few international airlines that is profitable, posting a net profit of £163m after carrying 22.7 million passengers last year.
Markets across the world have stabilised as Dubai World enters into talks to restructure its debt pile.