Emirates confirms staff layoffs as pandemic hits air travel demand
The airline vows to ensure those made redundant are looked after
Emirates, the world's biggest long-haul airline, joined its peers globally on Sunday and confirmed it is also laying off staff as a result of the coronavirus pandemic, which brought air travel to a halt.
The airline said that the pandemic had affected many industries around the world "and although we have endeavoured to sustain the current family as is, we reviewed all possible scenarios in order to sustain our business operations, but have come to the conclusion that we unfortunately have to say goodbye to a few of the wonderful people that worked with us", according to a statement carried by the Dubai Government media office on Sunday.
Emirates, which employs more than 60,000 people, did not quantify the redundancies or specify which functions would be affected.
The airline said it does not "view this [step] lightly" and will work with affected employees to ensure they are treated "with fairness and respect" and that they are "taken care of with necessary means".
Earlier this month, the airline said it was taking "aggressive" measures to protect its business from the effects of the Covid-19 pandemic while navigating a gradual return to operations in the coming months after reporting a 21 per cent rise in annual profit.
While Emirates' net income for the financial year ending March 31 rose to Dh1.1 billion, from Dh871 million a year ago, due to "healthy" demand and cheaper fuel, the Covid-19 crisis affected its fourth quarter.
Annual revenue declined 6 per cent year on year to Dh92bn due to a temporary suspension of passenger flights in March and the 45-day runway closure at Dubai International Airport.
"For the first 11 months of [the] 2019-20 [financial year], Emirates and dnata were performing strongly, and we were on track to deliver against our business targets," Sheikh Ahmed bin Saeed, Emirates chairman, said.
"However, from mid-February things changed rapidly as the Covid-19 pandemic swept across the world, causing a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions."
The outbreak has hit the global aviation industry, with strict movement restrictions wiping out passenger travel demand.
Global airlines face a severe liquidity crisis and bankruptcy after revenue plummeted due to reduced capacity or complete passenger flight suspensions.
Emirates' revenue fell 4 per cent as it carried 56.2 million passengers.
The airline reduced seat capacity by 6 per cent, leading to passenger load factor of 78.5 per cent, reflecting its "successful capacity management and positive travel demand across nearly all markets up until the outbreak of Covid-19 in the last quarter".
Emirates Group, which includes airport and travel services arm dnata, reported an annual 28 per cent decline in profit to Dh1.7bn in the fourth quarter due to Covid-19.
Annual revenue dropped 5 per cent to Dh104bn.
A strong dollar and unfavourable currency swings eroded the group's profits by Dh1bn, the group said.
The group said it would not pay a dividend to the emirate's government, which holds a stake through the Investment Corporation of Dubai, because of the "unprecedented business environment" and the need to protect its liquidity position.
Emirates Group ended the year with a cash balance of Dh25.6bn.
Updated: June 1, 2020 12:13 PM