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23 March 2020
INVESTMENT

Emirates Airline suspends passenger flights as COVID-19 slashes demand

Countries are closing their boarders to protect their populace, dealing a body blow to the global airline industry

International connectivity is crucial for Emirates’ Gulf hub model, which transformed Dubai into the world's busiest international airport six years ago/Bloomberg

by Kudakwashe Muzoriwa

Emirates Airline, the world’s largest long-haul airline, will suspend nearly all of its passenger operations and cut staff wages by as much as half because of the coronavirus impact on travel demand.

The state-owned Dubai carrier had already announced the suspension of nearly 70 per cent of its network of 159 destinations, asked staff to go on unpaid leave and frozen recruitment as the industry faces one of its biggest ever challenges.

The carrier stated that flights to most destinations will cease from 25 March 2020. Cargo service will remain in operation, as will routes to 13 countries including the US, UK, Switzerland, and Singapore in response to requests from governments and customers to support repatriation.

Sheikh Ahmed bin Saeed Al Maktoum, the Chairman and Chief Executive Officer of Emirates Group, said, “We cannot viably operate passenger services until countries re-open their borders and travel confidence returns, some of our competitors, or even our supply chain partners, may not survive this crisis.”

Emirates operates a fleet of 270 aircraft, mostly Airbus A380 and Boeing 777 passenger jets.

With its fleet of all wide-body aircraft, the state-owned airline has turned Dubai into a hub for global travel, typically operating more than 500 flights a day.

Emirates Group, a state holding company that includes the airline among its assets, will enforce a temporary 25 to 50 per cent reduction in basic salary for the majority of employees. The group had 100,000 employees, including more than 21,000 cabin crew and 4,000 pilots, at end-March 2019, the close of its last financial year.

Additionally, Emirates President Tim Clark, who is due to step down in June 2020, and Gary Chapman, President of Dnata will forgo their basic salaries for three months.

Carriers that were in relatively good health at the start of the year have had to ground fleets, lay off staff and request government aid for survival.

Major US carriers like Delta and American Airlines are waiting on lawmakers to clear a bailout package, while in London, where Heathrow airport the busiest hub in Europe, the government is considering moves to support the industry that include loans and potentially equity infusions.

The Emirates business model is built around a fleet of Airbus and Boeing long-distance aircraft carrying passengers between all corners of the globe, and while the spread of the virus is easing in parts of Asia, it’s accelerating in Europe and North America.

 


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