1) I thought Emirates was a profitable airline (if you believe all the financial reports and newspaper articles). What happened?
2) How will this affect start-up plans for Fly Dubai?
1. Emirates was and is still profitable. It's the whole Dubai Inc. (who owns EK) that is short of liquidity. For EY it would be a great step, their huge losses could just be covered by EKs profit. Even with a 20% entry share they could profit. They would influence streamlining of certain routes.
2. Most probalby stalling or considerably slowing this start.