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Emirates Group Reportedly Considers Mass Layoffs
The Emirates Group is considering a plan to cut around 30,000 jobs, reducing the number of employees by around 30%, Bloomberg News reported on Saturday, citing sources familiar with the matter.
The Dubai, United Arab Emirates-based group is comprised of Emirates in addition to Dubai National Air Transport Association (dnata), a company providing ground services at 78 airports, providing employment opportunities to 105,730 individuals of 160 different nationalities.
According to the report, the aviation giant is also drawing up plans to accelerate the process of decommissioning its Airbus A380 superjumbo fleet. The airline, operator of the world’s largest fleet of Airbus A380s, has 115 of the aircraft in its fleet in addition to eight aircraft pending delivery.
Amid the coronavirus outbreak that has shattered global aviation, Emirates grounded 85% of its fleet, suspending most of its flights on March 25 due to COVID-19 pandemic-related travel restrictions. The airline also reduced the basic salaries of most of its employees by 25-50% to avoid an imminent layoff. The Dubai-based carrier will resume passenger flights to 9 destinations — London, U.K.; Frankfurt, Germany; Paris; Milan, Madrid, Span; Chicago; Toronto; Sydney and Melbourne, Australia, including connections between U.K. and Australia — on May 21.
An airline spokesperson made an announcement upon the release of Bloomberg’s report.
“No announcement has been made regarding mass redundancies at the airline,” a statement from the airline read. “Any such decision will be communicated in an appropriate fashion. Like any responsible business would do, our executive team has directed all departments to conduct a thorough review of costs and resourcing against business projections, even as we prepare for gradual service resumption. As our Chairman has said, conserving cash, safeguarding our business and preserving as much of as our skilled workforce as possible, remain our top priorities through this period.”
However, the state-owned international aviation company released 2019-2020 annual report last week, highlighting that they continued to take “aggressive cost management measures” and “other necessary steps” to safeguard their business, adding that it would take at least 18 months for travel demand to recover from the COVID-19 pandemic and crisis would have a huge impact on the group’s performance in the following financial year.
The Dubai Government said in March that it would inject funding into the airline. In the fiscal year report, it is stated that the government would financially support the airline if it was necessary. An Emirates spokesperson reported that Dubai’s commitment to provide the airline with equity injections would allow it to preserve its workforce.
“It would also allow it to be ready to resume flights when possible and continue to operate cargo and other services, the spokesperson added.
In an interview with an Abu Dhabi, United Arab Emirates-based newspaper, Emirates President Tim Clark stated that if there were no state intervention, many airlines would have collapsed.
“Had the natural laws of supply and demand and survival of the fittest worked, I think we would have seen the culling of many airlines. I thought about 85 would go bust had there been no state intervention,” he said. “State intervention has kept that from happening, and it has stopped some of the smaller carriers going out of existence. How long that will go on for I don’t know. I am still not optimistic about the survivability of quite a few carriers.”
Despite all the impacts of the pandemic, Emirates has not imposed any layoffs yet. But, as the airline president stated, how long that will go on for is unclear.
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