European Airlines Warn of Up to 30,000 Job Losses Amid Virus Crisis
May 01 2020 - 10:23AM
Dow Jones News
By Anthony O. Goriainoff
--Ryanair said Friday it intends to cut up to 3,000 jobs, and
close bases across Europe until traffic recovers, warning that
could be in 2022
--IAG's British Airways plans cut up to 12,000 staff while
Lufthansa has said it has "10,000 employees too many on board"
--Norwegian Air subsidiaries have already filed for bankruptcy,
threatening close to 5,000 jobs
European airlines have outlined plans for tens of thousands of
job cuts in the wake of the coronavirus pandemic as the industry
braces itself for a period of years before passenger numbers fully
recover.
British Airways and Ryanair both said this week they were
cutting their workforce drastically as planes stay grounded for
long periods of time.
CMC Markets analyst Michael Hewson says that the reality is that
the aviation and travel sector will likely take several years to
return to any sense of normality. Ryanair has said there won't be a
recovery in passenger demand or pricing until at least summer 2022
at the earliest, while British Airways owner International
Consolidated Airlines Group SA says it will take several years.
"It is highly unlikely that normal service could be resumed at a
time when social distancing is likely to be with us for some time
in the absence of a vaccine," Mr. Hewson says adding that airlines
are going to face an enormous challenge getting people back on
planes until confidence has returned.
Ryanair said on Friday that it would cut up to 3,000 jobs,
mostly pilots and cabin crew, and was looking at reducing its
growth plans by cutting the number of planned aircraft deliveries
that were originally expected over the next two years. It also
plans to close a number of aircraft bases across Europe until
traffic recovers.
The British Airline Pilots Association accused the low-cost
airline of having "done a U-turn" on its ability to weather the
Covid-19 storm and said that there had been no prior warning or
consultation.
"This is miserable news for pilots and staff who have taken pay
cuts under the government job retention scheme," Balpa General
Secretary Brian Strutton said.
Balpa asked the U.K. government to keep its promise to help
airlines or else the industry would be devastated.
Earlier this week IAG warned that its British Airways unit would
likely lay off up to 12,000 employees, blaming the impact of
Covid-19 and expectations of a slow recovery in demand. Balpa said
on Tuesday that the news came as a bolt out of the blue "from an
airline that said it was wealthy enough to weather the Covid storm
and declined any government support."
On Friday, IAG said that group airlines Iberia and Vueling
secured 1.01 billion Euros ($1.2 billion) in new loans from Spain's
government to mitigate the hit from the virus.
Deutsche Lufthansa AG said on April 23 that it was in aid talks
with several European governments--including Austria, Belgium and
Switzerland--after its revenue for the first quarter fell 18% to
EUR6.4 billion. On Thursday the German airline's Chief Executive
Carsten Spohr said the company had 10,000 employees too many, and
that he wouldn't rule out laying off staff for operational
reasons.
Norwegian Air Shuttle subsidiaries that employ its cabin crew
and pilots in Sweden and Denmark have filed for bankruptcy. The
low-cost carrier blamed a lack of financial help from governments
amid the coronavirus pandemic demand slump. Norwegian said that the
bankruptcies mean that 1,571 pilots and 3,134 cabin crew are now
out of work.
The International Air Transport Association has warned that up
to 6.7 million jobs could go across Europe, estimating each job
created in the aviation industry supports a further 24 in the wider
economy.
Write to Anthony O. Goriainoff at
anthony.orunagoriainoff@dowjones.com
(END) Dow Jones Newswires
May 01, 2020 10:08 ET (14:08 GMT)
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