Etihad Airways is to extend staff salary cuts through to the end of 2020 as the struggling carrier attempts to shore up its finances which have been further battered by the Corona crisis. Workers will have wages trimmed by 10 per cent from September through to December 2020 under the new proposals to cut payroll costs – down from earlier pay cuts of between 25 and 50 per cent.
The Abu Dhabi-based airline has already laid-off hundreds of employees in an effort to cut costs after the COVID-19 pandemic caused travel demand to plummet and revenues to dry up. Hundreds of employees have also been asked to take up to six months of unpaid leave.
Last month, Etihad reported a first-half loss of $758 million which it blamed on a near 40 per cent drop in revenues from March onwards. In 2016, the government-owned carrier reported a record $1.87 billion net loss but had been hoping to finally break even after a multi-year transformation programme that has seen the airline significantly reduce the scale of its ambition.
In contrast to the decision by Etihad to extend pay cuts, Emirates told employees last week that it would fully reinstate basic pay at the end of September. Pilots, cabin crew and other workers have had their pay cut by as much as 50 per cent since April when flights were grounded worldwide. Emirates has, however, cut some allowances.
A spokesperson for Etihad confirmed the plan to cut pay through to the end of December but said the airline would start paying some allowances that had been suspended, including transport allowances.
Etihad was forced to ground flights in late March due to COVID-19 restrictions put in place by the UAE government and only restarted regularly scheduled flights in June. Travel restrictions and border closures, however, continue to linger and Abu Dhabi remains closed to visitors.
