Russian jet crash puts Sharm resort staff on 'unpaid leave'

A cafe employee sits waiting for customers at the Red Sea resort of Sharm el-Sheikh.
A cafe employee sits waiting for customers at the Red Sea resort of Sharm el-Sheikh.REUTERS

SHARM EL SHEIKH, Egypt (AFP) - The Russian plane crash in Egypt has forced hotels in Sharm el-Sheikh to send dozens of staff on "unpaid leave" as tourist numbers plunge, with tens of thousands of jobs at risk within months.

The Oct 31 crash over the Sinai Peninsula that killed all 224 people on board prompted Russia and Britain to halt flights to the Red Sea resort and to begin repatriating nationals holidaying there.

The Egyptian affiliate of the militant Islamic State in Iraq and Syria (ISIS) group claimed it brought down the plane minutes after it took off from Sharm el-Sheikh, and there are growing suspicions this was done with a bomb.

Two weeks after the tragedy, the travel restrictions have hit hard, with resort operators in Sharm el-Sheikh cutting staff to reduce costs.

"I have been told not to come from tomorrow," luxury hotel employee Ahmed said on Friday, giving only his first name.

"I'll be called if the situation improves. Nothing is clear."

Ahmed said five other employees at his hotel were also told to go on unpaid leave.

At least four luxury hotels confirmed to AFP they have asked several employees to take leave.

Tourism employs one in nine workers in Egypt, and in Sharm el-Sheikh nearly 80,000 depend on it for their livelihood.

"The way the situation is, about 40,000 people risk losing their jobs within months," Givara El-Gafy, head of the South Sinai chamber of tourism, told AFP.

Although plagued by instability since the 2011 ouster of longtime president Hosni Mubarak and a rising tide of militant attacks, Egypt's tourism had shown signs of a pick-up ahead of Christmas and the New Year.

Resort owners were even considering hiring new staff, but no longer.

"We stopped hiring new staff... and those who want to go can go," said Anwar Hawary, a manager at a five-star hotel.

For a hotel to break even, at least 30 per cent of its rooms have to be occupied, experts say. Failing that, many hotels, especially new ones, will have to close.

In a holiday spot such as Sharm el-Sheikh, many foreigners are also employed in resorts and companies catering to tourists.

"Two days back I lost my job," said Oxana, a Russian who worked for an Egyptian perfume company based in Sharm.

"Sixteen of our 20-member sales team have been told to go," she said.

Oxana, 40, said her clients were Russian holidaymakers who stayed in the coastal town for weeks at a time.

With a monthly salary of about US$600 (S$850), Oxana said she lived comfortably in Sharm - a favourite holiday destination for millions attracted by its pristine beaches, sunny weather and dive sites.

"I can live off my savings for two months, but if things don't improve by then, I'll have to return to Moscow," said the former rescue diver.

Chances of finding a job in Moscow are also tough because of the economic recession back home, she said.

"I prefer working here... the weather is beautiful and Sharm is safe."

For some big resorts, however, the lull in business is an opportunity to renovate their properties.

"This is a blessing in disguise," the general manager of a luxury hotel chain told AFP.

"We plan to close two wings of our hotel for renovation, so that when the situation changes, we are ready."

Prospects of that happening in the near term were called into question Friday when reports from Russia said the Federal Air Transport Agency (Rosaviatsia) had banned EgyptAir flights to Russia from Saturday.

Moscow's Domodedovo airport told AFP they had received a telegram to that effect from Rosaviatsia, but the agency declined to comment.

Meanwhile, the British government said the country's airlines will stop repatriating tourists from Sharm el-Sheikh on Tuesday, and that anyone who stays after that will have to fly back "at their own risk".

"British airlines estimate that after this date, there will be fewer than 200 of their passengers remaining in the resort," a statement said.

Anyone staying on "should make their own alternative arrangements for returning to the UK".