In April 2020, Emirates was processing approximately half a million refunds on flights. It was three years ago and the beginning of the Covid-19 pandemic, which had only just been officially deemed as such by global health authorities.
At the time, the airline group’s chief executive and chairman, Sheikh Ahmed bin Saeed, cited “a sudden and tremendous drop in demand for international air travel as countries closed their borders and imposed stringent travel restrictions”. According to Sheikh Ahmed, the company would “take aggressive cost management measures, and other necessary steps to safeguard our business, while planning for business resumption”.
While many organisations and businesses, both in the UAE and around the world, were also making similar decisions, it is the latter part of Sheikh Ahmed’s statement that is most instructive for us all today.
“Planning for business resumption” was not a throwaway remark designed to provide a silver lining to the cloud we were all living under. The airline’s management was highly conscious about not over-doing the cost cutting, diminishing capacity to such an extent that they would miss the opportunities that would be on offer once the rebound began. Of course, everyone was concerned about survival – economic and literal – and the pandemic proved to be deadly. There was so much we did not know in the spring of 2020, but Emirates knew that at some point the crisis would pass and normal business would resume.
This stance came to mind following the news this month that staff at Emirates airlines will enjoy a share of a Dh10.6 billion ($2.9 billion) bonus pot after the company recorded its highest annual profit yet.
Documentation seen by The National shows that more than 50,000 of its employees will receive 24 weeks of pay with their May salary. The flagship airline in Dubai posted a $2.9 billion profit in the fiscal year that ended on March 31. "For our outstanding performance in 2022-2023, you deserve every bit of the 24-week profit share," the document read.
Revenue jumped 81 per cent to about $29 billion, as the airline more than doubled the number of passengers carried, restored most of its global network and reinstated more passenger flights after the lifting of Covid-19 travel restrictions. The airline carried 43.6 million passengers, up 123 per cent from last year, it said.
“We had anticipated the strong return of travel, and as the last travel restrictions lifted and triggered a tide of demand, we were ready to expand our operations quickly and safely to serve our customers,” Sheikh Ahmed said on Thursday. “As a result, we have delivered a record financial performance and cash balance for our financial year 2022-2023.
“This reflects the strength of our proven business model, our careful forward planning, the hard work of all our employees, and our solid partnerships across the aviation and travel ecosystem.”
This is understated and humble. Yet the achievement is remarkable. Many other airlines are still struggling to get back to profit, even if the International Air Transport Association forecasts an overall net profit for the industry this year. It is expected to be $4.7 billion compared to a pre-pandemic $26.4 billion in 2019.
The prognosis will improve of course. In the meantime, Emirates staff will share in the success they helped achieve.
Their reported bonuses remind me of another business concept – what is known as the "PayPal effect”. After the US digital payment platform was sold to eBay in 2002, former employees went on to start a number of successful technology companies. The PayPal alumni includes Tesla’s Elon Musk, LinkedIn’s Reid Hoffman and YouTube co-founders Steve Chen, Chad Hurley and Jawed Karim.
Something similar happened when hundreds of new millionaires were created among the staff of Careem after its sale to Uber, with 275 of the Dubai ride-hailing technology company’s employees receiving Dh1 million or more for their shares. Two hundred employees became dirham millionaires and about 75 became dollar millionaires.
Some of the Emirates employees enjoying a windfall and looking back at the most difficult period of their professional lives may decide that it is time for a new challenge or a fresh venture. What will their experience, expertise and knowledge create for the UAE economy in the years to come?
Whatever that ends up being, the seeds of the future are always sown in the decisions taken in the present.