Etihad Airways will no longer provide accommodation allowances to new staff choosing to live outside Abu Dhabi.
The new policy, which also gives existing staff a grace period of 12 months to move to the UAE capital, was communicated by Frank O’Dwyer, vice president of facilities, to all Etihad UAE staff in an email this week.
It is understood the move will affect many of Abu Dhabi’s 8,500-strong workforce who currently live in Dubai due to the availability of lower rents. Real estate analysts have recently reported that rents in the UAE capital are up to 40 percent higher than Dubai.
The new policy, which also gives existing staff a grace period of 12 months to move to the UAE capital, was communicated by Frank O’Dwyer, vice president of facilities, to all Etihad UAE staff in an email this week.
It is understood the move will affect many of Abu Dhabi’s 8,500-strong workforce who currently live in Dubai due to the availability of lower rents. Real estate analysts have recently reported that rents in the UAE capital are up to 40 percent higher than Dubai.
“Following an in-depth review of Etihad’s accommodation assistance policy, it has been decided that the company will now only provide housing allowance to those members of staff living in the emirate of Abu Dhabi,” the email, which has been seen by Arabian Business, told staff.
“This decision is based on the operational, welfare and financial requirements of the company as well as our responsibility to Abu Dhabi, which provides enormous support for Etihad and its people.
“Previous accommodation shortages in Abu Dhabi have now been addressed and it is important that we support the investment that has been made, especially at Etihad-owned facilities,” the email continued.
The email added that the policy “is effective immediately for new staff, but for employees currently residing outside Abu Dhabi it will apply no later than 12 months from today.”
It added that there would be exceptions to the new rule but they would be dealt with on a case by case basis.
An Etihad spokesperson told Arabian Business on Thursday that “this is an internal business decision, and affected staff are being kept well informed”.
“We have made the decision for a range of reasons – including operational. Not only do we have a responsibility to Abu Dhabi, but it obviously makes sense for our people to live close to our headquarters and operational base,” the spokesperson added.
“The rental allowances we provide are generous and options in Abu Dhabi are plentiful, including facilities Etihad has developed specifically for its people. We have provided a very fair notice period for people to relocate, as well as a range of assistance measures,” the spokesperson added.
The email to staff added that “exceptions to this, for example those with specific requirements related to family situations, will be considered on a case by case basis. The facilities department will provide assistance during the transition. Those affected by the policy change will be contacted in the coming weeks.”
Online forums in Dubai have suggested that staff currently living in Dubai might be tempted to look for jobs with Emirates and flydubai but the Etihad spokesperson added: “We have no evidence of people seeking to leave employment with Etihad as a result of this change.”
Last month, Asteco said apartment rents in the UAE capital had fallen by up to 15 percent during the first three months of 2010 and are expected to soften further as more new properties come onto the market.
Around 15,000 new units are expected to be completed in Abu Dhabi this year and the increase in supply will result in residential rental rates dropping by around 20 percent, new research by the Landmark Advisory consultancy firm claimed earlier this year.
