Abu Dhabi, UAESunday 20 September 2020

CORONAVIRUS

Emirates to restore employees' full salaries from October

Abu Dhabi's Etihad Airways to reinstate staff allowances while extending wage cuts until end of 2020 but at reduced rates

Emirates slashed costs and conserved cash by reducing wages, cutting jobs and offering cabin crew voluntary unpaid leave to cope with the fallout from the pandemic. Getty Images
Emirates slashed costs and conserved cash by reducing wages, cutting jobs and offering cabin crew voluntary unpaid leave to cope with the fallout from the pandemic. Getty Images

Emirates will reinstate the full salaries of its staff from October after having taken measures to preserve cash during the coronavirus-induced slowdown.

The move comes as the airline resumes passenger flights to more destinations, expanding its network to 84 destinations with the restart of services to the Nigerian cities of Lagos and Abuja this week.

"Emirates will restore full salaries of our employees from next month," an airline spokeswoman said in an emailed statement on Sunday.

Like many other airlines around the world, Emirates took steps to slash costs and conserve cash by reducing staff wages, cutting jobs, and offering cabin crew voluntary unpaid leave to cope with the fallout from the pandemic.

In March, the Dubai government pledged to inject additional equity into the state-owned airline that has helped transform the emirate into a global travel hub. It did not disclose the amount of financial support.

Meanwhile, on Sunday Abu Dhabi's Etihad Airways said it will extend the duration of employees’ wage cuts until the end of 2020, albeit at a reduced rate.

Starting from this month, Etihad Air will reinstate all staff allowances and cap the reduced pay scheme at 10 per cent of basic salary until the end of the year, an airline spokeswoman confirmed in an emailed statement on Sunday. This compares to the previous cuts of 25 to 50 per cent that ended in August.

"The commitment and dedication demonstrated by the entire Etihad workforce over the past five months has been greatly appreciated," the spokeswoman said.

The aviation industry is among the sectors hardest hit by the coronavirus-induced crisis, which halted air travel and forced cash-strapped airlines to seek financial rescue packages from governments.

Airlines around the world face a collective loss of $84 billion (Dh308.5bn) this year as the pandemic halves revenue in the worst year in aviation history, according to the International Air Transport Association.

Global passenger traffic is unlikely to recover to pre-crisis levels before 2024, Iata predicted.

The trade group, which represents about 290 airlines around the world, called on governments to urgently reopen borders and continue with relief measures to help airlines survive during the Covid-19 crisis.

The call came after passenger numbers during summer, considered peak season, were disappointing for airlines as four in five potential travellers stayed home, according to the organisation.

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Global passenger traffic fell by 80 per cent in July, compared with a year ago, as travel restrictions affected demand, Iata said.

Load factor, a measure of how well an airline fills available seats, fell to a record low of 58 per cent.

Middle East airlines registered a 93.3 per cent annual decline in traffic in July, compared with a 96.1 per cent drop in demand in June, Iata said in its monthly report. Capacity fell by 85.6 per cent while the load factor was down 43.4 percentage points to 38 per cent.

The global industry figures for July pointed to a gloomy outlook for airlines in the absence of a Covid-19 vaccine, which is expected to restore the confidence of passengers.

A second wave of infections around the world has prompted governments to reinstate or consider new restrictions on travel, denting recovery prospects for the sector.

Iata blamed persistent border restrictions for the shaky recovery globally and repeated its pleas for governments to adopt Covid-19 testing at airports as an alternative to measures such as quarantines that deter potential travellers.

"No government wants to import Covid-19. Equally, no government should want to see the economic hardships and associated health impacts of mass unemployment." said Alexandre de Juniac, Iata's director general, said on September 1.

"If government policies focus on enabling a safe re-start, aviation is well-prepared to deliver."

Updated: September 6, 2020 06:12 PM

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