In the wake of the rapidly growing coronavirus disease cases, Dubai’s government is ready to inject equity into Emirates Airlines. This is after the Middle East’s largest carrier has grounded nearly all of its flights due to global restrictions on travel.
Crown Prince Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum stated that the state-owned airline would be supported after this trying period. This is in consideration of the company’s strategic importance to Dubai and the economy of the United Arab Emirates, as well as the “key role in positioning Dubai as a major international aviation hub.”
“Today, we renew our commitment to support a success story that started in the mid-1980s to reach its goal of sitting on the throne of global aviation. The Government of Dubai is committed to fully supporting @Emirates at this critical time & will inject equity into the company.”
What is not clear is the size, shape and form of that bailout, but we can be sure that further details would be announced at a later stage.
Emirates carried close to 58 million passengers in 2019, keeping Dubai’s airport as the world’s busiest for international travel. However, the increase in coronavirus cases and travel disruptions have affected the aviation industry worldwide, resulting in temporary layoff of cabin crew and pilots.
The Dubai government owns not just Emirates airlines, but also flydubai and the two have the same chairman, but operate independently.
Emirates employs more than 100,000 people including 21,000 cabin crew and some 4,000 pilots. The airline has been looking for ways to reduce outgoings, including reducing staff salaries by between 25 and 50% for the next three months, with the president of the carrier taking a full basic salary cut for that period of time.
Just recently, flydubai also announced pay cuts of its staff of nearly 4,000, though not all staff are being affected the same. The company stated that it is reducing salaries to between 25-50% for a three-month period starting in April. Employees’ benefits will remain unchanged, and senior employees will see the biggest pay cut.
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