Etihad Airways will no longer provide accommodation allowances to new staff choosing to live outside Abu Dhabi, Arabian Business has learnt.

The new policy, which also gives existing staff a grace period of 12 months to move to the UAE capital, was communicated by Frank O'Dwyer, vice president of facilities, to all Etihad UAE staff in an email this week.

It is understood the move will affect many of Abu Dhabi’s 8,500-strong workforce who currently live in Dubai due to the availability of lower rents. Real estate analysts have recently reported that rents in the UAE capital are up to 40% higher than Dubai.