Amid the pandemic Emirates and Etihad Airways plan to cut staff salary by 50% to save costs till September.
The aviation industry is the worst hit by the Covid-19, causing a reduction in travel demand. Therefore, forcing major airlines to lay off employees and seek government bailouts.
Pay cuts at the Emirates
Emirates announced the news through a memo to its employees that it is extending a salary cut for three months until September 30.
Previously, the airline cut basic salary for three months from April, by 25%-50%. Junior staff was not part of this pay cut.
Grade 4 staff will be subject to this salary reduction. But, in some cases, these pay cuts will be even more crucial. However, a reduction in the basic salary will be about 50%, the memo to employees mentioned.
The memo said, “We continue to navigate the impact of COVID-19 on our business and are reviewing all possible options to preserve our cash position.”
Pay cuts at Etihad Airways
Similarly, Abu Dhabi based airline-Etihad Airways is also planning to extend its salary cuts until September.
Its junior staff and cabin crew members were on 25% reductions and will continue to experience the same. But, employees at the managerial level and above will have to face a 50% pay cut in their salary.
Benefits such as housing allowances will continue to be paid.
Both the airlines are operating with less number of flights. The airlines grounded their operations of passenger flights in March.
The airlines will resume their connecting flights from this month. As the UAE lifts a ban on services where passengers stop off in the country to change planes, or for refueling.
Emirates will have to further cut jobs by 30%. It has a workforce of about 105,000.
Etihad is opting for this move to preserve cash for the coming months. The airline also laid off some of its cabin crew. But, it does not plan any further layoffs.
Likewise, other airlines have also laid-off employees. Such as Gulf carrier Qatar Airways also says it can lay off up to 20% of its employees.
Effects of Covid-19
As soon as COVID-19 made it’s way to different countries, they all decided to minimize the travel activities, as this virus is highly contagious.
The ban on international travel brought misfortune for the airlines. Most of the airlines are laying off employees, grounding their operations, and doing cost-cutting in every possible way.
For many airlines, it has not been easy to keep up the business. As only a few passengers are traveling on daily basis.
Due to the pandemic, many travelers were canceling their flights. They were not sure if it was safe to travel at this hour.
According to data from SITA there has been a decline in the flights of about 80% globally as compared to last year.
Speculations are that it will take almost two years to again get the same kind of demand for the airline industry