The UAE’s Emirates Airlines has announced it will suspend all passenger flights by 25 March in response to the Covid-19 pandemic.
Freight travel will not be affected by the latest decision, but some Dnata operations have been “significantly reduced” in response to reduced customer demand.
“The world has literally gone into quarantine due to the Covid-19 outbreak,” Sheikh Ahmed bin Saeed al-Maktoum, chairman and CEO of Emirates Group said.
“Until January 2020, the Emirates Group was doing well against our current financial year targets. But Covid-19 has brought all that to a sudden and painful halt over the past six weeks.”
Sheikh Ahmed said Emirates found itself in a situation where it could not “viably operate passenger services until countries re-open their borders, and travel confidence returns”.
He added: “Emirates Group has a strong balance sheet, and substantial cash liquidity, and we can, and will, with appropriate and timely action, survive through a prolonged period of reduced flight schedules, so that we are adequately prepared for the return to normality.”
A press statement published by the airline stated that basic salaries would be temporarily reduced for Emirates employees over the next three months.
Reductions of 25-50 per cent are expected in basic salaries, but allowances will continue to be paid and junior employees will be exempted from the basic salary reduction.
The presidents of Emirates and Dnata, Tim Clark and Gary Chapman, will take a 100 per cent basic salary cut for three months.
The airline has also decided to postpone or cancel discretionary expenditure and freeze non-essential recruitment and consultancy work to cut costs as the outlook for travel demand remains weak in the short to mid term.
“Rather than ask employees to leave the business, we chose to implement a temporary basic salary cut as we want to protect our workforce and keep our talented and skilled people, as much as possible,” Sheikh Ahmed said.
“We want to avoid cutting jobs. When demand picks up again, we also want to be able to quickly ramp up and resume services for our customers.
“These are unprecedented times for the airline and travel industry, but we will get through it. Our business is taking a hit, but what matters in the long run is that we do the right thing for our customers, our employees and the communities we serve.”
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