Since returning to the air last month, Emirates has implemented a dizzying array of measures designed to reassure the traveling public that it’s unlikely to contract Covid-19 on its planes. Its website features a flow sheet detailing infection-prevention measures at nearly every step, including free “hygiene kits” for every passenger, single-use menus on board, lavatory cleaning every 45 minutes, and high-efficiency particulate air filters in the cabin air circulators.
Every airline has implemented a roster of safety measures, of course. There’s little hope of attracting passengers without them. But earlier this week, Emirates upped the ante on its competition with a true industry first: coronavirus insurance.
Any Emirates passenger unfortunate enough to contract Covid-19 within 31 days of flying will be entitled to a range of benefits including coverage of medical expenses up to €150,000 ($177,000), quarantine reimbursement up to €100 a day ($118) and, if it comes to it, even a funeral allowance of €1,500 ($1,770).
“We know people are yearning to fly as borders around the world gradually re-open,” the carrier’s group chairman Sheikh Ahmed bin Saeed Al Maktoum said in a statement. “But they are seeking flexibility and assurances should something unforeseen happen during their travel.”
The insurance is automatic, effective immediately, and carries no fees for travelers.
Emirates did not disclose the additional cost that offering such an indemnity represents, but the fact that the airline is committing itself to the indemnity (and at a time when the International Air Transport Association reports that global traffic for 2020 will be down 55%) provides some indication of how urgently Emirates is trying to lure passengers back to its planes.
Which means that the insurance isn’t just an incentive for travelers, but a marketing play as well.
“It’s a very well-conceived idea,” said public relations veteran Matt Rizzetta, founder and CEO of the North 6th Agency (which has no business relationship with Emirates.) “It demonstrates the integrity of the brand to the public, and it shows they have empathy for their customers and understand the current environment.”
While there are certainly carriers in worse shape than Emirates (president Sir Timothy Clark told the BBC last month that his airline is “not as badly off as others”), the coming of Covid-19 has marked an abrupt end to what had been one of the industry’s longest winning streaks.
Emirates marked its 32nd consecutive year of profits when it filed its annual report in May, but its earnings of $456 million already represented a 28% drop from last year’s figure, mostly a result of Dubai International Airport’s 45-day shutdown. Emirates had already cut staff salaries by 25-50% at that time. Last month, it laid off 9,000 workers, with Clark warning that “we will probably have to let go of a few more.”
Emirates’ Covid insurance comes at a time when all air carriers find themselves torn between the competing mandates of paying for safety measures needed to lure flyers back and the revenue-building measures necessary to keep them in business.
These days, every safety protocol an airline adopts is an opportunity to market and differentiate itself. But requiring masks and wiping down arm rests is clearly less expensive than paying six-figure medical bills for every passenger who contracts Covid.
U.S. carriers including Delta and United have historically complained that Emirates enjoys the unfair advantage of government subsidies—a contention that the Dubai-based carrier hotly denies. “Emirates is one of the world’s leading airlines precisely because Emirates does not depend on government subsidies, bail-outs, and bankruptcy laws, but operates as a consumer-focused, profit-driven, commercial enterprise,” the company said in a 2015 rebuttal to these claims.
In any case, Emirates obviously sees its new insurance as a price worth paying in hopes of boosting flyer confidence enough to increase bookings. But Emirates is also taking a bit of a gamble with its reputation by venturing into new and unproven territory.
A number of media outlets have already picked up on the fact that Emirates’ insurance includes a death benefit (“This airline will Cover Funeral Costs” blared the New York Post’s headline on Tuesday), which encourages the kind of mental imagery that an airline normally wouldn’t want associated with its brand.
Rizzetta also observed that this kind of insurance is simply untried and carries the risk of reputational damage if it’s not done well. “There’s no precedent,” he said. “They don’t have the benefit of data to get that intelligence into their strategy.”
Even so, he added, “they should get credit for taking the risk and being the first to move on this.”
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