UAE Residents May Aid Aviation Recovery, Says GlobalData’s MEED

Aug. 17, 2020

The United Arab Emirates (UAE’s) National Emergency Crisis and Disaster Management Authority (NCEMA) announced that special approval will no longer be required for residents stranded outside the country to return to the UAE. This latest development will likely be the impetus required to jumpstart recovery at the UAE’s flag carriers, says GlobalData’s MEED.

With five full-service and low-cost national airlines in operation, residents and tourists will have several price points to choose from as they plan their return to the UAE. For flag carriers Etihad Airways, Emirates, Fly Dubai, Air Arabia and the newly launched low-cost Air Arabia Abu Dhabi, the development presents an avenue for recovery.

Neha Bhatia, Construction & Infrastructure Editor at GlobalData’s MEED, comments: “Capitalizing on these opportunities is all the more critical for local airlines, which have suffered the brutal economic effects of the COVID-19 pandemic. Full-service carriers Etihad and Emirates, as well as budget airline Fly Dubai, have all announced wide-ranging redundancies and salary cuts since air travel closed in the UAE late in March.”

Travel restrictions introduced in the second quarter of 2020 have led low-cost carrier Air Arabia to a loss of AED169m ($46m) for the first half of the year. Turnover for the first six months of 2020 was just over AED1bn, a reduction of 53% compared to the first half of 2019.

Demand for air tickets to the UAE is likely to be high in the weeks to come. Government estimates suggest that at least 200,000 residents with valid visas were stranded outside the UAE as of June 11. Around one-third of these individuals returned between March 25 and June 8 under the first phase of a program targeting humanitarian cases.

Bhatia adds: “More residents will now return as summer holidays draw to an end for schools and universities, and work resumes at business, social and service facilities. At a time when COVID-19 has uniformly decimated aviation industry prospects, the UAE’s decision could restore healthy competition in the sector.”