Etihad Airways cuts jobs in growth plan U-turn

Etihad Airways will eliminate jobs across several units, highlighting the pressure on carriers in the Persian Gulf to adapt to slowing growth after years of aggressive expansion.

The Abu Dhabi-based company is undertaking “organisational reviews and restructuring” to “reduce costs and improve productivity and revenue,” an Etihad spokesman said.

This will result in “a measured reduction of headcount” in some parts of the business amid an “increasingly competitive landscape” and a weaker global economy, he said. 

The cutbacks started in the last few weeks and will range from about 1,000 to 3,000 jobs, according to sources.

Several dozen people have already left the information-technology department and reductions are also planned in the human resources and commercial sales. 

Cuts will also involve cabin crew and ground staff, another source said. 

The spokesman for Etihad, the third-largest Gulf carrier behind Emirates and Qatar Airways, declined to specify the number of employees affected.

Etihad is changing course with the job cuts. 

The company almost tripled its staff to 20,292 in the past eight years, as its fleet expanded to 122 aircraft from 42.

It employs 26,769 when including subsidiaries and employees abroad. 

Its aggressive bid for growth included buying stakes in European carriers Air Berlin and Alitalia, which are both struggling.

Air Berlin, which is cutting its core fleet in half, named Lufthansa manager Thomas Winkelmann as chief executive, replacing Stefan Pichler, who lasted less than two years.

Hit by the economic fallout of lower oil prices, Gulf airlines are facing slower growth and need to adjust after years of expansion.

Emirates reported a 64% plunge in first-half profit, while Qatar Airways said that demand from the oil and gas industry was softening during the drop in crude prices.

Net income for airlines from the Middle East will drop to a combined $300m (€287m) in 2017 from $900m expected for 2016, the International Air Transport Association forecast this month.

Part of the Gulf airlines’ shifts include slowing capacity growth on European routes, once a key source of traffic gains, according to figures compiled by travel-data company Diio. 

Expansion of 4.1% predicted for the first quarter would be lowest level in more than a decade. n Bloomberg


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