EK Pay Review. Going Going GONE!
Whatever the EK pay review it has been obliterated in the past three months. Unless it is over 10% overall then most of us are worse off than we were a year ago. And lets hope they don't give out with one hand and take away with the other in the form of cutting various allowances.
These are the figures since 1st Febrary. The previous quarter. The percentages are the drop in value of the Dirham against the respective currency.
AED vs EUR 1st Feb - 0.197384 29th Apr - 0.183241 - 7.2%
AED vs GBP 1st Feb - 0.168844 29th April - 0.163396 - 3.2%
AED vs AUD 1st Feb - 0.268944 29th April - 0.248475 - 7.6%
AED vs SGD 1st Feb - 0.346149 29th April - 0.33359 - 3.6%
AED vs INR 1st Feb - 12.4356 29th April - 12.0395 - 3.2%
AED vs BRL 1st Feb - 0.452430 29th April - 0.429956 - 5.0%
AED vs CHF 1st Feb - 0.255583 29th April - 0.235776 - 7.5%
AED vs SAR 1st Feb - 1.97654 29th April - 1.79565 - 9.2%
Of course if we look at the last year its even worse. Since 29th April 2010
AED vs EUR 29th Apr - 0.205364 29th Apr - 0.183241 - 10.8%
AED vs GBP 29th Apr - 0.178225 29th April - 0.163396 - 9.3%
AED vs AUD 29th Apr - 0.293094 29th April - 0.248475 - 15.2%
AED vs SGD 29th Apr - 0.372632 29th April - 0.33359 - 10.5%
AED vs INR 29th Apr - 12.1183 29th April - 12.0395 - 0.7%
AED vs BRL 29th Apr - 0.473240 29th April - 0.429956 - 9.2%
AED vs CHF 29th Apr - 0.294657 29th April - 0.235776 - 10.0%
AED vs SAR 29th Apr - 2.00427 29th April - 1.79565 - 10.4%
Some other factors to consider:
Emirates is currency hedged. They take revenue in many currencies but pay their bills predominantly in USD. Their wage bill has dropped considerably against revenue.
Currently Emirates voices concern about rising oil costs. Actually oil is not rising much, its the dirham and the dollar are falling. Oil vs Euro is relatively flat. Emirates currency hedge works here quite well.
As the Emirates wage bill falls, they are better positioned than other airlines to lower prices and increase yield so a rising oil price plays into their hands up to a point.
I dont see a 10% increase in salaries and flying pay. Those whose home currencies are not tied to the USD have taken a 10% hit over the last year and are worse off than this time last year and likely to remain so. The USA has emphatically pointed out they will not raise rates for some time. The Dirham will continue to weaken.
ERP doesnt cut it. It protects only half the salary to a max of 15% and washes out over time. Hence the most anyone can ever get is 7.5% of salary protection. This does not include flying pay, appointment allowance, provident fund, education or accommodation. Aussies, for instance, can look forward to the ERP going down soon as they have been getting it for some time now but the baseline is rising towards 1.0. Ergo the ERP will soon reduce unless the AUD keeps rising. It is based on a rolling average which is going up.
From the above figures you can expect your cost of living in Dubai to go up about 7% in the coming months. On the bright side (or dark side for some) expect Dubai property prices to rise along with rentals. they are now under valued.
Its going to be a very tough year for some as Ben Bernake continues to devalues your salary to pay for American corporate greed.