COVID-19: Emirates Planning to Cut 30,000 Jobs Amid Low Demands

Emirates Airline Emirates Airline
  • COVID-19: Emirates Planning to Cut 30,000 Jobs Amid Low Demands

The world’s largest long-haul carrier, Emirates Group, is said to be planning to cut at least 30,000 jobs in order to reduce operating costs as COVID-19 pandemic weighs on demands.

According to the people familiar with the situation, the group had reduced its staff strength by around 30 percent from more than 105,000 at the end of March to better manage the COVID-19 crisis.

However, lack of cure and the inability of most economies to open fully after months of locked down continues to hurt the group’s operating costs, revenue generation and overall profitability.

Also, the airline is said to be considering accelerating the retirement of the A380 fleet, according to people familiar with the situation.

In April, the International Air Transport Association (IATA) had predicted that global airline companies will post a combined $39 billion loss in the second quarter of 2020 given over 38 percent fall in global demand.

The association estimated that the sector revenue will decline by $252 billion in 2020 when compared to 2019 revenue.

“This is less than the expected 71 per cent fall in demand due to the continuation of cargo operations, albeit at reduced levels of activity. Variable costs are expected to drop sharply—by some 70 per cent in the second quarter—largely in line with the reduction of an expected 65 per cent cut in second quarter capacity. The price of jet fuel has also fallen sharply, although we estimate that fuel hedging will limit the benefit to a 31 per cent decline,” the association said.

Similarly, IATA said the pandemic would cost Nigeria’s aviation sector over N160.58 billion in revenue and more than 22,200 jobs as flight restrictions persist.

Earlier this month, the Minister of Aviation, Hadi Siriki, said many of Nigeria’s airline will not come out of COVID-19 given the level of damage already done to their revenue.

He said the sector is losing about N17 billion monthly.

He said “Certainly in civil aviation, we’re in very difficult moments like everyone else…but we are worst hit than any other sector. Some N17bn monthly is being lost by the Airlines to COVID-19.”

“This is the situation of civil aviation. It is really a pathetic one and I can guarantee you that several airlines won’t come out of this unfortunately.”

Arik, one of the nation’s airlines, announced 80 percent salary cut for the month of April and forced staff on compulsory leave start from May 1st. Other airlines have since followed in the same footstep, especially after the Federal Government extended restrictions in the sector to further curb the spread of the virus.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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