I can’t say that I saw this coming but Emirates Airline just announced that they will be suspending ALL passenger flights.
Over the past few weeks, we’ve seen various airlines scale down their network and cut back on their routes, but I never thought I’d see the day where Emirates shut down completely.
According to Emirates, the airline is temporarily suspending passenger operations as of Wednesday (25 March 2020). The airline isn’t giving a timeline for service being reinstated, other than saying that they will reinstate service “as soon as things allow.”
The company explains that they’ve tried to maintain passenger flights for as long as feasible, but it’s reaching the point where travel bans, restrictions, and country lockdowns across the world have become too much to handle.
HH Sheikh Ahmed bin Saeed Al Maktoum, CEO of Emirates, said the following:
“The world has literally gone into quarantine due to the COVID-19 outbreak. This is an unprecedented crisis situation in terms of breadth and scale: geographically, as well as from a health, social, and economic standpoint. 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 6 weeks.
As a global network airline, we find ourselves in a situation where we cannot viably operate passenger services until countries re-open their borders, and travel confidence returns. By Wednesday 25 March, although we will still operate cargo flights which remain busy, Emirates will have temporarily suspended all its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services.
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.”
Per the memo above, the airline has undertaken a series of measures to contain costs. These measures include:
- Postponing or cancelling discretionary expenditure
- A freeze on all non-essential recruitment and consultancy work
- Working with suppliers to find cost savings and efficiency
- Encouraging employees to take paid or unpaid leave in light of reduced flying capacity
- A temporary reduction of basic salary for the majority of Emirates Group employees for three months, ranging from 25% to 50%. Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction
- Presidents of Emirates and dnata – Sir Tim Clark and Gary Chapman – will take a 100% basic salary cut for three months
As Sheikh Ahmed explains the decision to reduce basic salary:
“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. 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.”
It’s impressive that at least at this time, Emirates isn’t planning on laying off any employees.
Just a few days ago the UAE announced some strict travel restrictions including:
- Banning nationals from leaving the country
- Banning visa holder residents from entering the country
- Suspending the issuance of all visas
Up until this point, Emirates has been operating essentially as an airline for transit passengers (via Dubai) but I’d say that this is probably the most drastic cut we’ve seen in the industry so far.
Pay reductions are always unfortunate but fortunately it sounds like they’re not laying off anyone…for now.
I think this is a good indication of how much the airline industry is suffering.
What do you think about this situation? Did you have travel plans with Emirates?