Airlines

Abu Dhabi's Etihad Airways warns of redundancies 'across several areas'

Key Points
  • The airline industry remains crippled by global lockdowns and border closures, with demand for air travel down 90% around the world.
  • Reviving it will be incredibly challenging given the new mandatory social distancing requirements, airline executives say.
An attendee at the Dubai Air Show enters an aircraft on Nov. 13, 2017, in Dubai, United Arab Emirates.
Natalie Naccache | Bloomberg | Getty Images

DUBAI, United Arab Emirates ― Etihad Airways on Tuesday announced it would be laying off staff across its company, becoming the latest in a series of airlines to announce plans to downsize as the industry gets hammered by the coronavirus crisis. 

"The coronavirus pandemic has brought unprecedented challenges to businesses around the world, and Etihad is no exception. It is clear the demand for travel in the near future will be significantly reduced and as a result we must make difficult decisions to ensure Etihad will weather this storm," an Etihad spokesperson told CNBC.  

"We are incredibly proud of our world-class workforce, however, we have had to make redundancies across several areas of our business to reflect current market conditions." 

The UAE's flag carrier, and the country's second-largest airline, did not specify the number of jobs to be cut or the areas which would see redundancies. 

Based in Abu Dhabi, the state-owned airline had 20,530 employees as of August 2019. It suspended all passenger operations in late March at the order of the UAE government, and in April announced it had begun to cut wages and make staff redundant. It has operated select repatriation flights since then, and announced this week that it would recommence certain routes beginning June 1.  

Etihad Airways has lost more than $5 billion since 2016, and since 2017 has been working to cut costs as part of a turnaround strategy. It had been aiming to become profitable by 2023, a plan that now looks implausible as international air travel will likely take several years to recover, according to industry leaders. 

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Robin Kamark, Etihad's chief commercial officer, said in late 2019 that, "by 2023, we will have very good news … five years is enough, if nothing geo-political happens or macro events that we haven't foreseen." 

The airline industry remains crippled by global lockdowns and border closures, with demand for air travel down 90% around the world. Reviving it will be incredibly challenging given the new mandatory social distancing requirements, airline executives say, with planes expected to fly at significantly lower capacities and many on-board services scrapped.  

The UAE's largest carrier, Dubai-based Emirates Airline, has also disclosed a hit to earnings from the coronavirus and subsequent lockdowns. The Emirates Group is reported to be cutting 30,000 jobs, although the company has not confirmed this.

The CEO of Dubai Airports last week called social distancing "ruinous" for the travel industry. The International Air Transport Association estimates that passenger traffic won't rebound to pre-crisis levels until at least 2023.