Emirates joins airlines’ high-loss club


(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

LONDON (Reuters Breakingviews) – Emirates has joined an unfortunate elite club. The Gulf airline, owned by the government of Dubai, on Tuesday posted a $6 billion loss https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2021.pdf for 2020. That puts it on a par with London-based International Airlines Group, parent of British Airways, and is only marginally healthier than European rivals Air France-KLM and Deutsche Lufthansa, 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 https://investor-relations.lufthansagroup.com/fileadmin/pm/news/financial-news/lufthansa-group-announces-medium-term-targets-and-makes-preparations-for-a-capital-increase/pdf/investor-presentation.pdf, 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

Oaktree offer puts a fresh shine on Crown

Adani’s rollercoaster ride is a costly lesson

Hong Kong’s business standing weakens

U.S. malls are a tale of two REITs

(SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS: http://bit.ly/BVsubscribe | Editing by Liam Proud and Oliver Taslic)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.