Emirates has joined an unfortunate elite club. The Gulf airline, owned by the government of Dubai, on Tuesday posted a $6 billion loss for 2020. That puts it on a par with London-based International Airlines Group (ICAG.L), parent of British Airways, and is only marginally healthier than European rivals Air France-KLM (AIRF.PA) and Deutsche Lufthansa (LHAG.DE), which lost $7.5 billion and $8.1 billion respectively. Aggressive cost-cutting by Emirates’ state backers averted a worse financial disaster.
For a state-owned company, the airline’s job-cutting zeal stands out. Staff numbers went from 109,000 to 75,000 in a year, a swingeing 31% drop. That may only be possible because of the large numbers of non-Emirati citizens on its payroll. Lufthansa, by contrast, shed 26,000 positions, a 19% drop. It plans more cuts as part of a long-term overhaul. Strong unions and Berlin’s weak hand on the Lufthansa joystick, courtesy of a 9 billion euro government bailout, mean they’re not set in stone. (By Ed Cropley)
On Twitter http://twitter.com/breakingviews
Capital Calls – More concise insights on global finance:
Singapore can wield stick to win tech IPOs read more
Oaktree offer puts a fresh shine on Crown read more
Adani’s rollercoaster ride is a costly lesson read more
Hong Kong’s business standing weakens read more
U.S. malls are a tale of two REITs read more
Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.