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Air Arabia is in talks with the Emirati government over a possible financial aid package, given the growing impact COVID-19 has had on the budget airline's bottom line.

Last week, chief executive Adel Ali told a virtual CAPA aviation summit that a request for assistance has indeed been lodged with Abu Dhabi.

"We have put a request in," he was quoted by the international press. "If it comes, we will be very happy. It will help us to pay some of our outstanding [debts] quicker. If it doesn't, I think we can survive hopefully for some time to come."

The airline subsequently clarified Ali's comments noting that the UAE government had invited all of the country's national carriers, including Air Arabia, to discuss the impact of COVID and requested studies to determine the next step forward.

"Any support from the government would be welcomed given the extreme and unprecedented challenges that COVID 19 has imposed, significantly constraining air transport operations," it said in a stock market filing.

For the first nine months of 2020, Air Arabia has lost AED212.5 million dirhams (USD57.86 million), compared with an AED791 million profit for the same period a year ago. For its part, Emirates Group, which includes Emirates, Emirates Skywards, Emirates SkyCargo, and other aviation and travel-related assets, reported a loss of USD3.8 billion for the first half of 2020 on revenue of just USD3.7 billion, down 74% year-on-year. The airline, which recorded a USD235 million half-year profit in 2019, said it had received USD2 billion in state assistance from the Dubai government between April and September this year. It labeled the aid as an equity investment.

In August, fellow carrier Etihad Airways reported operating losses of USD758 million for the first six months of 2020. According to an internal memo seen by Reuters this week, given continued weak global travel demand, the airline will lay-off more flight and cabin crew as it moves to ground its fleet of ten A380-800s indefinitely.

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