British no-frills airline EasyJet PLC yesterday said that it would axe up to 4,500 jobs, or almost one-third of its workforce, as the COVID-19 pandemic ravages demand and grounds global air travel.
“We are planning to reduce the size of our fleet, and to optimize the network and our bases. As a result, we anticipate reducing staff numbers by up to 30 percent across the business and we will continue to remove cost and noncritical expenditure at every level,” EasyJet CEO Johan Lundgren said in a statement.
The job cuts would affect up to 4,500 of the carrier’s 15,000 staff, a spokesman told reporters.
Photo: Reuters
A consultation process is to be launched in the coming days.
The pandemic has devastated the global aviation sector, with passenger numbers slumping as air travel demand evaporates due to lockdown measures.
EasyJet follows competitors British Airways, Ryanair and Virgin Atlantic Airways Ltd, which have all slashed staff numbers to save costs.
“We realize that these are very difficult times and we are having to consider very difficult decisions, which will impact our people, but we want to protect as many jobs as we can for the long-term,” Lundgren said.
“We remain focused on doing what is right for the company and its long-term health and success, following the swift action we have taken over the last three months to meet the challenges of the virus,” he added.
EasyJet had grounded its entire fleet at the end of March and plans to retake to the skies in the middle of next month with a limited number of flights.
“Although we will restart flying on 15 June, we expect demand to build slowly, only returning to 2019 levels in about three years’ time,” Lundgren said.
“We want to ensure that we emerge from the pandemic an even more competitive business than before, so that EasyJet can thrive in the future,” he said.
However, the airline said that it would not provide any outlook as a result of the turmoil.
“At this stage, given the level of continued uncertainty, it is not possible to provide financial guidance for the remainder of the 2020 financial year,” EasyJet said.
“However, as shown in this release, we continue to take every step necessary to reduce cost, conserve cash burn, enhance liquidity, protect the business and ensure it is best positioned on our return to flying,” Lundgren added.
The pandemic has battered the air transport sector by all but grounding airplanes, resulting in layoffs, bankruptcies and rescue plans worldwide — although Deutsche Lufthansa AG is wavering over a 9 billion euro (US$9.9 billion) German state lifeline.
Lufthansa’s supervisory board on Wednesday raised the stakes in a tug-of-war with the EU, holding off on accepting the German rescue that includes the bloc’s anti-trust demands.
European Commission conditions requiring the surrender of takeoff and landing slots would weaken company hubs in Frankfurt and Munich, Germany.
The airline opted against immediately calling a shareholder vote and said that the proposal would be reviewed, citing a need to analyze the economic effects, the repayment of the aid and possible alternative scenarios.
The bailout remains “as the only viable alternative for maintaining solvency,” said the board, an oversight body on which workers are heavily represented.
The International Air Transport Association this week forecast that global airlines would lose about US$314 billion in revenue this year due to the pandemic.
Additional reporting by Bloomberg
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