British airline steps away from major transit hub as emirate begins to show signs of economic downturn
British airline Virgin Atlantic announced on Thursday it will end flights between London and Dubai, citing “external factors”, as the emirate appears to suffer an economic downturn.
Virgin said the route was no longer economically viable, and flights between two of the world’s busiest transit hubs are due to end on 31 March 2019.
The company said it will still accept bookings up until the very last flight.
“It‘s never an easy decision to withdraw a route,” said Shai Weiss, chief commercial officer for Virgin Atlantic, adding that the company “will be sad to say goodbye to this fantastic city”.
Dubai is facing a sharp recession, London-based newspaper al-Quds al-Araby reported earlier this month.
Residents of the emirate told the paper its city’s famous shopping malls had turned into ghost towns, with hotels and bars closing their doors as customers fail to walk through them.
The famous gold souk was almost empty, the residents said, in scenes unseen for 40 years.
Earlier this year, the Kuwait Financial Centre released a report saying that sales of real estate projects under construction had plummeted by 46 percent in the first quarter of 2018.
The report said sales of previously owned property fell by 24 percent in the same period.
In April alone, liquidity in Dubai fell by 35 percent, according to the report.
Unlike its oil-rich neighbour Abu Dhabi, Dubai lacks the natural resources to make it one of the Gulf’s wealthiest states.
Instead, much of Dubai’s wealth comes from its property market and financial services.
In 2008, the global recession caught up with previously bullish Dubai, hitting it hard.
Property prices were slashed by between a third and a half, while the stock market fell by 70 percent.
A $20bn lifeline provided by Abu Dhabi saved Dubai from going bust.
However, the emirate still suffers under a large amount of debt - $140bn worth, according to the International Monetary Fund in 2015 – which economists say leaves Dubai vulnerable in the event of another downturn.