Airport and travel services company dnata, a part of the Emirates Group, plans to hire 7,000 staff from around the world amid expectations of stronger travel demand and a profit increase in the 2023-2024 financial year.
Of the 7,000 positions, more than 1,500 people will be recruited in Dubai, dnata group chief executive Steve Allen told The National.
Dnata aims to recruit airport customer service agents, baggage handlers, kitchen staff for in-flight meal catering, call centre operators and travel agents.
The Dubai-based company is also seeking to fill a “large number” of specialist roles – from chefs to data scientists, as well as senior management positions, during the current financial year, which began on April 1.
In its last fiscal year, dnata grew the number of employees by 17 per cent on an annual basis, expanding its workforce to 46,000 people.
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“This year we’re looking at about another 7,000 people [including over 1,500 people in Dubai] to be brought onboard as our volumes continue to grow,,” Mr Allen said during an interview at Emirates Group headquarters in Dubai.
"There’s some attrition as well as some people leaving, so that’s not cumulative growth, but for replacement and growth."
The company, which was founded in 1959, handles a range of aviation services. Its airport operations include ground-handling at 86 airports and cargo services at 48 airports.
Another business division handles in-flight catering and retail while another unit sells travel services.
Dnata's hiring spree is part of a “mammoth” global recruitment drive by the Emirates Group, which includes Emirates airline, as it pushes to boost its workforce for its next major growth phase.
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The move comes as the global aviation industry faces a labour shortage in all areas of the business, from pilots to baggage handlers, ticket agents, flight attendants and aircraft mechanics.
With the sector seeking to ramp up operations in response to booming travel demand, competition for skilled talent is fierce, particularly so after many aviation workers were laid off during the Covid-19 pandemic, forcing them to move into other occupations.
Europe, the US and Canada remain “challenging” environments for the recruitment of aviation workers, Mr Allen said.
Asked how dnata is approaching its recruitment drive during the global labour crunch, Mr Allen said the company was offering “attractive” packages with increased pay over the last fiscal year to match the rising cost of living.
Making dnata a “great place to work” and offering career growth opportunities is also an important part of the company's approach to attract and retain talent, he said.
Currently, the state of the aviation industry is "more controlled, steadier and definitely more planned" than last year, when airlines were reactively dealing with sporadic border reopenings, he said.
The reopening of China's borders to international travellers this year is another bright spot and has given dnata a "huge" boost to its business in the Asia-Pacific region.
“The story of this year is a much-improved position, continued growth and continued stabilisation of the aviation industry,” Mr Allen said.
He expects Chinese international travel to strengthen later this year around September, with a bigger influx of Chinese visitors to Dubai and other destinations.
The company expects a “successful summer” ahead with the surge in travel demand after the Covid-19 pandemic, he said.
Mr Allen does not see a repeat of last year's summer travel chaos that plagued major airports in the US and Europe. He expects a more stable summer travel season as airlines and hubs have had time to recruit more staff and plan more carefully.
Travel demand has remained resilient in the face of inflationary pressures and higher air fares, with big global airlines filling more seats and reporting higher profits.
There are no signs of a slowdown in global travel, with growth continuing unabated, so 2023 will remain a “very strong year” as demand continues to outpace the available seat capacity of airlines, Mr Allen said.
“The airlines are still going to do extremely well in their business and the whole supply chain benefits from that,” he said.
Asked how long the travel boom could last amid a higher cost of living, Mr Allen said there were no signs of a slowdown in the near future due to pent-up demand.
In addition, markets with an expanding middle class, where more people are aspiring to travel, such as India, China and South America, will drive new business and benefit dnata as a global company, he said.
Stronger profitability
With a bright travel outlook, dnata expects its annual 2023-2024 profit to exceed the Dh331 million ($90 million) reported in the previous financial year and Dh110 million in the financial year before that, with growth across its business units, Mr Allen said.
“Some of the biggest gains will be in parts of the world that weren’t open last year, particularly the Asia-Pacific, which was pretty dormant this time last year,” Mr Allen said.
Business in Europe is picking up again while the UAE and Saudi Arabia continue to experience a boom that is driving high volumes across the Middle East, putting dnata in a “good place” within its main hub, he said.
The company expects the number of aircraft turns handled to increase 12 per cent on an annual basis during its current financial year, Mr Allen said.
Cargo tonnage handled during the fiscal year is forecast to rise 10 per cent while meal catering is set to rise by 14 per cent and travel transaction value by 23 per cent, he said.
Air freight is “normalising” from the peaks recorded during the pandemic, he said.
This is due to increased capacity on the cargo holds of passenger aircraft returning to the skies and a reduction in sea-freight rates.
Air cargo, an economic bellwether linked to global trade, is also affected by geopolitical tension, resulting in shifts in trade routes due to “near-shoring” – a situation in which goods and services are produced or provided closer to companies' home bases to reduce risks and costs.
Planned investments
Dnata is also seeking to step up its investments in line with its growth and profitability expectations.
In 2023, the company earmarked Dh300 million to invest in new technology projects, which will be spent over the coming years, Mr Allen said.
It is also considering various projects for both cargo warehouses and catering complexes in different parts of the world.
In the UAE, dnata has signed off on a “major investment” to build a warehouse in Dubai South. The district is a master development focusing on aviation, logistics and property.
The company is also currently considering eight or nine merger and acquisition opportunities around the world, particularly in growth markets in South America, East Africa, the Middle East and the Far East, Mr Allen said.
"We plan to invest a total of over Dh500 million in our operations, including infrastructure, technologies and equipment, this financial year," he said.
This year, dnata expects to exceed the number of contracts it signed last year, Mr Allen said. In 2022-2023 it won more than 90 new contracts across its ground handling and cargo businesses globally .
In June 2022, dnata also pledged to invest $100 million in green initiatives, including infrastructure and equipment, amid a push to meet its sustainability goals.
“I’m looking at all sorts of energy replacement opportunities because we’ve committed to a 20 per cent reduction in our carbon footprint by next year and 50 per cent by 2030, so the $100 million investment will set us well on track for that,” Mr Allen said.
Asked about the potential for new business in markets such as India, with the revamp of Air India, or Saudi Arabia, which has big plans to expand its aviation industry, Mr Allen said dnata was looking for opportunities in those markets.
Dnata is in discussions for new opportunities in Saudi Arabia.
“Watch this space,” he said, declining to provide details of discussions.
Asked about a potential listing of dnata in the future, Mr Allen said: "We are not in the position to comment on this. It is the decision of our shareholder, the Dubai government."
While Mr Allen indicated he was bullish about the outlook for travel, he also warned of headwinds and rising costs.
The "unpredictable" state of the global economy, the Russia-Ukraine war, an increase in the cost of living and persistent supply chain issues are among the main concerns facing the aviation industry, he said.
“We’ve had to be quite agile in looking at supply chains because some of them have been restricted and we’ve had to look for new sources,” Mr Allen said.
"There is no significant impact of the supply chain challenges on our operations. However, there are delays – for instance, some spare parts of ground support equipment [GSE] that were delivered in six weeks, now are handed in six months," he said.
In terms of in-flight meal catering, Dnata is working with airlines on their menus to source more ingredients locally and resolve supplier challenges.
“We’ve got the inflationary pressures around the world, particularly in northern Europe and America … you’ve got the war in Ukraine, which is impacting global travel and cargo flows … And the opening of China hasn’t, perhaps, happened as fast as the aviation industry would like,” Mr Allen said.
