Emirates president sees revival by June 2021, "can't keep staff doing nothing for so long"

Official says next six to nine months will be 'tough' for the airline industry

  
Sir Tim Clark, President of Emirates Airlines, gestures during a news conference at the Dubai Air Show in Dubai, UAE, November 12, 2017.

Sir Tim Clark, President of Emirates Airlines, gestures during a news conference at the Dubai Air Show in Dubai, UAE, November 12, 2017.

REUTERS/Satish Kumar

The next six to nine months will be very tough for the airline industry and things will start to go back to normal in June 2021, Emirates president Tim Clark said on Monday.

In a live session during the first day of the virtual Arabian Travel Market (ATM), Clark confirmed that the Dubai-based carrier has decided to make some job cuts to cope with the cash burn caused by the coronavirus pandemic.

He said the airline could no longer afford to continue paying all of its staff, while a huge proportion of its fleet, including all the A380 aircraft, has been grounded due to the suspension of passenger flights.

“The next six to nine months is going to be tough…[But] my own belief is that there’s sufficient resilience in the global economy to take this on. As long as it doesn’t go for too long, if we can accept that there’s a finite point where we will see the back of this… we will see things moving back to some kind of normality in June 2021. [In the meantime], we just have to toughen it out,” Clark said.

“I’m afraid that [unemployment] is one of the casualties at the moment. In a nutshell, we can’t keep our employees doing nothing for so long, and so have to let some of them go,” Clark said.

Emirates issued a statement on Sunday to confirm it has opted to trim down its workforce as the disruptions caused by the pandemic has decimated airline passenger revenues.

As of late April, the International Air Transport Association (IATA) said that estimated revenue losses for airlines in the  Middle East region could reach $24 billion, approximately $5 billion more than was expected at the beginning of the month.

It said job losses in the aviation and related industries could grow to 1.2 million, or half of the region’s 2.4 million aviation-related employment.

Muhammad Al Bakri, IATA’s regional vice president for Africa and the Middle East said in April that airlines in the Middle East continue to be battered by the impact of coronavirus, adding that no amount of cost-cutting will keep carriers afloat.

“Passenger traffic has all but ground to a halt and revenue streams have evaporated. No amount of cost-cutting will save airlines from a liquidity crisis. The collapse of air transport will have devastating effects on countries’ economies and jobs,” Al Bakri said.

The UAE government suspended all inbound, outbound and transit flights in late March as part of the precautionary measures to stem the spread of coronavirus. Emirates, as well as Etihad, resumed some of the flights recently as countries around the world attempt to revive the economies.

Clark admitted that, with practically almost all of its passenger fleet grounded, the airline is currently “in suspense.”

“I don’t think, in my career, I’ve seen anything like this. If you were to aggregate all the crisis that we’ve faced in the last 30 or 40 years, I don’t think it will be equal to what has happened here. This is a huge structural change to our industry,” Clark said.

The airline, one of the world’s biggest long-haul operators, posted a 21 percent increase in profit for its financial year ending on March 31. According to Clark, the airline had a good start to the year, until airline operations were brought to a grinding halt in March.

“Up until the middle of February, things were going well, but then we had started to see the beginnings of the demand destruction as a result of the virus starting to take hold in Asia, then migrating into Europe. Nevertheless, we had strengthened our cash position. The balance sheet was very strong. We had been taking new aircraft and opened new routes… It had all the makings of a great year, until this thing happened,” Clark said.

(Reporting by Cleofe Maceda, editing by Seban Scaria)

(Cleofe.maceda@refinitiv.com)

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