Emirates President Tim Clark previously told The National, a newspaper in the neighboring Emirate of Abu Dhabi, that “the time of the A380 is over” and that the airline will shrink by 20 to 30 percent as a result of the corona pandemic.
The Bloomberg news agency also announced on Sunday that Emirates is considering dismissing 30,000 employees, which corresponds to 30 percent of its workforce. So far, there has been “no announcement of mass layoffs at the airline,” said an Emirates spokesman. Such a decision would be “communicated in an appropriate manner”.
Emirates told the Arabian Business magazine “to strive to save cash, safeguard our business and preserve as much of our skilled workforce as possible during this period.” The magazine, published in Dubai, citing well-informed sources, reported that Emirates was planning to fire most of its A380 pilots and only keep 20 planes from its superjumbo fleet.
So far, industry circles have assumed that only 46 of the 115 A380 aircraft will be shut down permanently. Instead, Emirates is concentrating on the Boeing 777. Emirates also operates the world’s largest fleet with 155 aircraft and 126 other aircraft ordered.
Emirates canceled further orders for A380 aircraft last year. Airbus then announced the production shutdown for 2021. At the Dubai Air Show in November 2019, Emirates ordered 50 Airbus A350s for $ 16 billion and 30 Boeing 787 Dreamliners for $ 8.8 billion. The first deliveries are planned for 2023. The aim is to complement the existing fleet mix and to ensure flexibility in use within the long-haul hub model in Dubai.
Resumption of flight operations
Emirates will resume regular flight operations on Thursday, initially with nine international destinations. The flights can be booked through the airline’s website. However, before starting the flight, passengers must demonstrate that they meet the requirements and entry criteria for their destination countries.
There are flights to and from Frankfurt three times a week. However, only German or EU citizens are allowed to travel to Frankfurt, from Frankfurt only citizens of the United Arab Emirates and people with residence permits or long-term visas for the UAE. Before the corona crisis, Emirates had flown to 157 cities in 83 countries.
The cargo division Emirates SkyCargo has meanwhile expanded its scheduled freight operations to 75 destinations on six continents. In April alone, more than 2500 flights were carried out. Every day, more than 100 flights depart from the Emirates SkyCargo hub in Dubai. Every week, five pure cargo flights depart from Frankfurt for the Gulf.
To survive the significantly reduced flight operations and downtime on the ground, Emirates raised $ 1.2 billion in loans and short-term debt in the first quarter. “We will also continue to go to the capital markets to get liquidity this quarter,” said Sheikh Ahmed bin Saeed Al Maktorum, Emirates Chairman and President, presenting business figures for the fiscal year ended March 31.
32nd annual profit in a row
The Emirates Group, which in addition to the airline also includes data services, catering companies and airport services, announced a 27.7 percent drop in earnings of the equivalent of $ 272 million. The company thus reported its 32nd annual profit in a row.
The airline alone increased its profit by 21 percent to $ 288 million. The reasons for this are the strong increase in demand for air travel at the end of last year, which, however, melted away with the spread of the corona virus, as well as low kerosene prices, which fell even further due to the recent oil price war.
Apart from the pandemic, the further strengthening of the dollar against the major currencies “reduced our profits”, global air freight demand remained weak for most of the year and competition “intensified in our key markets,” said Emirates CEO Sheikh Ahmed Shrinking profit.
Emirates had 56.2 million passengers last year. That was 4.2 percent less than in the previous year. Airline occupancy rose by 1.7 percentage points to 78.5 percent, and the profit margin climbed by 0.2 percentage points to 1.1 percent.
He saw his airline in the first eleven months of the 2019/20 financial year “on the best way to achieve our business goals,” said Sheikh Ahmed. However, things began to change rapidly from mid-February, “when the Covid 19 pandemic swept across the world, causing a sudden and huge drop in demand for international air travel as countries closed their borders and imposed severe travel restrictions.”
Two of the largest airlines in the Middle East warn that 85 percent of airlines worldwide will face bankruptcy without government intervention by the end of the year. Passenger demand will only return to pre-crisis levels in 2023, said Emirates President Tim Clark and Tony Douglas, CEO of Etihad Airways, in a joint statement.
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