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Coronavirus in UAE: Emirates suspends most passenger flights, announces pay cuts

Staff Report
Filed on March 22, 2020 | Last updated on March 22, 2020 at 05.20 pm
emirates, coronavirus, covid-19, dubai, airline, aviation industry, emirates suspends flights

The salary cut ranges from 25 to 50 per cent, but junior level employees are exempt from this deduction.

Dubai-based Emirates will temporarily suspend most passenger operations from March 25 due to the Covid-19 outbreak. The airline will also continue to operate cargo flights.

Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates Group, said: "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 most of its passenger operations. We continue to watch the situation closely, and as soon as things allow, we will reinstate our services."

Emirates said it will continue to operate passenger and cargo flights to the following countries until further notice, as long as borders remain open, and there is demand: the UK, Switzerland, Hong Kong, Thailand, Malaysia, Philippines, Japan, Singapore, South Korea, Australia, South Africa, USA, and Canada. The situation remains dynamic, and travellers can check flight status on emirates.com.

"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 six weeks."

A statement from the airline said it tried to maintain passenger flights for as long as feasible "to help travellers return home amid an increasing number of travel bans, restrictions, and country lockdowns across the world". "It continues to maintain vital international air cargo links for economies and communities, deploying its fleet of 777 freighters for the transport of essential goods including medical supplies across the world," it said.

Sheikh Ahmed said the Emirates Group has a strong balance sheet and "substantial cash liquidity". "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."

dnata has also significantly reduced its operations, including temporarily shutting some offices across its international network.

Salary reduction

As a cost-cutting measure, the airline will initiate a temporary reduction of basic salary for the "majority of" Emirates Group employees for three months. The salary cut ranges from 25 to 50 per cent. The Presidents of Emirates and dnata - Sir Tim Clark and Gary Chapman - will take a 100 per cent basic salary cut for three months.

Employees will continue to be paid their other allowances during this time. Junior level employees will be exempt from basic salary reduction.

"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.

"The Emirates Group has strong liquidity, with a healthy cash position but it is prudent that it take steps to reduce costs at this time. Emirates remains committed to serving its markets and looks forward to resuming a normal flight schedule as soon as that is permitted by the relevant authorities."

The other cost-cutting measures are:

> 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


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