“We are seeing in the world unprecedented activities [that] will change the world immensely after corona”
Dubai International Airport, one of the world’s busiest air transport hubs, suspended passenger flights for two weeks starting Thursday to stop the spread of COVID-19 in the United Arab Emirates and as demand for flights waned. Abu Dhabi International Airport, in the federation’s capital, also halted air traffic.
Only emergency evacuation and freight flights will continue, in compliance with the government’s instructions, the Dubai airport said in a statement. Abu Dhabi’s airport made a similar announcement.
The UAE had initially barred all transit and other passenger flights for 48 hours, but by Tuesday morning, 50 new coronavirus cases were diagnosed, bringing the UAE’s total to 248. (By Thursday, the UAE had 333 cases.)
Since then, 90% of the flights had stopped operating, said Waddah Taha, a member of the National Advisory Council of the British Securities and Investment Institute in the Emirates. That meant that 230 planes were unable to depart. There was a “massive decrease in the volume of movement” in the Emirates and elsewhere, Taha told The Media Line.
The global travel and tourism industries have taken a huge hit from the coronavirus pandemic. Dubai, an international shopping destination, draws much of its revenue from tourism. The financial damage due to the virus is significant for countries that depend on tourists, said Taha, an economic expert. Dubai is one of many places that “deteriorated because of this.”
Many airlines may go bankrupt by May if this situation continues and they do not receive financial support, he said. Some are ending service and laying off 90% of their employees, he added. State-owned Emirates airline, the world’s fourth-largest air carrier by scheduled passenger miles, reduced some salaries by 25 to 50%. On March 2, the airline asked staff to take time off because of a “measurable slowdown” in travel demand.
In general, “there must be government support,” Taha said. “Dubai has capabilities,” but poor, developing countries will have to ask World Bank or international institutions for help.
Mohammed Yasin, chief strategy officer at Abu Dhabi Capital, told The Media Line that for Dubai and Abu Dhabi to shut down their airports and the passenger flights of Emirates and UAE flag carrier Etihad Airways, indicated that the cost of running them had become uneconomical because of the pandemic.
“It’s an extremely difficult decision for both of them, but maybe for Dubai … a bit more,” Yasin said. The emirate was already established as a hub. “India and China used to fly here as a stop-over to go places like Europe and even North America.”
The Los Angeles-Dubai and Los Angeles-Abu Dhabi flights used to be packed, Yasin continued, “Most of the planes were full of people transiting [through] Abu Dhabi or Dubai, just on the way back home, to India and China.”
Shutting down air traffic would have been unthinkable earlier, he said. The stoppage hurts workers at the airlines, the airport and supply chains, including food, catering and power, as well as hotels, Yasin said.
“Airlines, when they establish themselves in a country at the level that Emirates and Etihad did, become an engine of economic activity.” Many sectors, including shopping malls and duty-free sales, are affected, as is government income, he said.
“We are seeing in the world unprecedented activities (that) will change the world immensely after corona,” he said. “The world pre-corona will not be the same one post-corona.
COVID-19’s effect on social activities and relationships and how governments handle the crisis and cooperate with each other will result in a “new world order going forward.”
The UAE government has acted swiftly in order to avoid overburdening the health system and causing panic, he said. The government is supporting the markets and banks and is letting people delay loan payments for three months. Credit card and mortgage payments have also been postponed.
Mazen Irshaid, an Amman-based financial expert who writes for several Arab media outlets, said that stopping aviation will damp Emirati trade, especially with China.
“Commercial air freight … continues but not with the same momentum,” Irshaid told The Media Line. Imports have shrunk, translating into less economic activity, he said.
The UAE’s main exports are shipped by sea, not air. Petroleum constitutes 80% of the exports, and oil prices fell 40% this month.
“China is the largest importer of oil, therefore any health crisis there will have economic repercussions for the production and export of oil,” he said.
Nevertheless, the UAE is in better financial shape than other Arab countries. The federation of emirates has enough foreign-currency reserves to pay for imports for at least eight months and perhaps a year, while other Arab countries have reserves sufficient for a month, Irshaid said.
The “UAE has a large stock of wheat” and enough food for several months, he added.
The coronavirus’s spread has forced many countries to close their borders, suspend flights, impose curfews, transfer education online, prevent public gatherings, and close mosques, churches and synagogues.