TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

INTRODUCTION 1

THE LAY OFF: 1

DUBAI FACILITY: 2

MOUTH-BALLING THE DUBAI FACILITY: 2

ESTABLISHMENT OF A SMALLER FOOD PRODUCTION SITE: 2

REFERENCES: 4
Executive Summary
Suggestive measures for Emirates Flight Catering to compensate for the profit reduction due to
COVID-19 pandemic. Suggestive measures for Emirates Flight Catering to care for employee morale
while cost cutting actions. Suggestive measures to start operations at a different downsized location.
Suggestive measures to relocate plant and facility components to save costs and make the transitioning
process faster.

Introduction
The COVID-19 pandemic has not only caused global panic it has significantly reduced profit
volumes across all industries but the travel industry has been hit the most as the lockdown prevents
people from travelling. Emirates Flight Catering services used to provide for all the inflight meals that
rounded up to a significant number of 38 million means in a single calendar year. And to produce such a
volume a state-of-the-art facility was made in the Dubai which is now affected as the production volume
has significantly dropped. Which means the cost of capitalization and new investment has been spread
over on even a greater number of years. Also, the cost of running the facility far exceeds the profits
made from the limited volumes of production. Which is why it is being considered to let go off around
400 employees currently working at the Dubai facility and use the remaining 700 employees to establish
a new and small facility that can be used to provide for meals until flights and general travelling goes
back to the normal pre-pandemic volumes. The following report is also an effort of maintaining
employee morale while carrying this lay off through.

The Lay Off:

 Gathering information:
Since we have decided that the layoff of around 400 employees is extremely crucial, we
need to make sure we are prepared before break the news to the affected employees. We need
to figure out how and when will the employees be informed and my suggestion is to do it slowly
at a rate of 43 employees per week, which allows us to lay off the entirety of 400 people in 2
months. And we do it individually. People are very likely going to have a tremendous number of
questions, tantrums and breakdowns regarding their benefits and severances and timing. And it
is found that it’s better to ease the employer’s and the employees’ anxiety before even the
questions popup by being prepared for such queries. Which means we need to prepare and
make allowances for their severance packages and 401ks as soon as possible.
Since due to the pandemic, it won’t be possible to deliver the news to the employees personally
so it is recommended to set the tone right and offer as much assistance as possible but don’t
overpromise. When laying off employees it is important to know that the employees may take
some time to process the news you just broke to them. So, they might come back later for
further questioning. And we need to be prepared for such incidents by making sure to know the
steps to recommend to the employees once they come back for questioning. These steps would
involve the following:
I. Suggesting the employee where to go to see government benefits in the times of
Corona.
II. Offer ideas about job opportunities at other organizations in the industry.
III. Offer to serve as a reference.
Dubai Facility:
The Emirates catering facility at Dubai is a gigantic meal production state of the art facility which
is competent enough to produce more than 225 thousand meals per day. These meals range across all
flight classes and across all tastes as emirates provides its services to over 100 airline clients dealing in
all formats of air travel. The amazing facility has the most modern automation facilities available for the
catering industry in the world and together with all of its components and departments the facility has a
geographic span of around 174 thousand square meters. Which includes a 4.2km long electric monorail
that is designed and established to transport meals and the facility also entails a 2.4km long conveyor
system for transporting clean items from one part of the facility to the production kitchen for the food
plating.
The facility has a throughout vacuuming system which requires them of 600 meters in length.
On top of that the facility also provides services other than food like laundry by the department called
Linen craft. It processes a glopping volume of around 210 tons per day which means 660 thousand
pieces per day.

Mouth-balling the Dubai facility:

As the world saw a devastating year 2020 at the hands of the Novel Corona Virus which resulted
in a global pandemic. A lot of people lost lives and loved ones to this deadly virus and the severity
resulted in many businesses being shut down across the world and suspended services for many more
businesses.
Travel industry in the one being hit the most as is it extremely inadvisable to travel during the pandemic
as the Virus is contagious and travelling further increases the chance of spread. The Emirates Catering
Facility that is located at Dubai have similar issues to deal with. As travel is reduced the facility is not
required to function at its peak volumes which is costly as the production overhead costs of unit (which
is a variable cost) shoots up. And there is literally only 2 ways around this problem. Increase the meal
prices by 300 percent or shut down the facility. Shutting down certain departments to reduce overheads
is not an option because all the components of this facility work in synergy to efficiently reduce
processing time. Which is why it is recommended to the board to currently mouth ball the Dubai facility.
Mouth-balling means to preserve the components in a maintained order so that operations can be
resumed once production volumes are required to be boosted. Which is a costly process but it is less
costly than running a huge industry at low production volumes. Currently the facility does employ
maintenance staff and maintenance staff is thereby required to be laid off in the end. We can use their
services to preserve the facility components.

Establishment of a smaller food production site:

Since the current facility is advised to be mouth-balled we would require to build or acquire a
separate smaller facility that is worked around to produce and process meals according to the current
needs of numbers. Which means we will have to run some regression analysis of data post Covid19 and
correlate those numbers with trends and then correlate those trends with events that can explain those
trends and numbers in order to generate the maximum capacity required and the minimum capacity
required for the new production facility that is to be acquired in order to cater for the current demand
that is reduced so that our operating incomes can balance our operating expenses. Which will allow us
to continue providing meals without increasing their costs. The smaller facility will have to be
engineered around crucial numbers and volumes and it is important to keep in mind the period for
which it is to be utilized. Since we already own a gigantic facility, we don’t need to entirely own a new
food production and processing site. We merely need to acquire a site to resume operations at lesser
fixed overheads. Which means we shouldn’t be purchasing land, property, equipment but leasing them
out for a certain period of time. It doesn’t take a rocket scientist to tell that things will return to
normality when vaccine for the virus becomes commonly available and to be on a safe side, we can
expect that to happen in 1.5 years. So, leasing in property and land for a total of 1.5 years won’t hurt us
as much as running a huge factory with limited production would. So Now we have the required
production capacity (via regression analysis of existing data) and we also know for how long do we have
to need a new facility for which solves many problems for us. As far as equipment is concerned, we can
use a hybrid combination of leasing in new equipment and relocating equipment from the original site
to the new for temporary usage. Equipment that doesn’t have huge installment costs should be
relocated to the new site and the equipment which would be costlier to move and install should be
leased in from the market. Doing so will get us to an efficiency point where we can operate the newer,
smaller facility while providing ourselves with the chance of going back to the older one as soon as
volumes normalize.
References:
 Sucher, Sandra J, and Shalene Gupta. “A Better, Fairer Approach to Layoffs.” Layoffs
That Don’t Break Your Company, Harvard Business Review, 23 Aug. 2019,
hbr.org/2018/05/layoffs-that-dont-break-your-company.

 Knight, Rebecca. “How to manage Coronavirus Layoffs with Compassion.”, Harvard

Business Review, 07 Apr. 2020, https://hbr.org/2020/04/how-to-manage-coronavirus-
layoffs-with-compassion?ab=hero-main-text&registration=success.

 Gulf News, Web Report. “190 Meals per Minute, 1,200 Chefs, 590 Flights Daily, 32
Years.” Aviation – Gulf News, Gulf News, 27 Oct. 2017, 09:19,
gulfnews.com/business/aviation/190-meals-per-minute-1200-chefs-590-flights-daily-32-
years-1.2112420.

 Flight Catering, Emirates. “Airline Catering Dubai: Emirates Flight Catering.” Airline
Catering Dubai | Emirates Flight Catering, 2018,
www.emiratesflightcatering.com/services/airline-catering/.