Airline Industry: Massive lay-off plans loom ahead
Massive lay-off plans loom ahead in the Airlines industry. The companies are running up losses partly because they can’t furlough or cut their staff more deeply than their bare-bones flight schedules.
“So, permanent cuts in the well-paying jobs found across the air sector are inevitable and coming soon,” says Alliance Research and Euler Hermes.
British Airways has already planned to remove around 30% of its workforce, while Ryanair could lay off 3,000 employees – mainly pilot and cabin crew jobs – starting next July if Covid-19 restrictions continue to batter the travel industry.
In the U.S., deep job cuts are coming after October 1 as the federal bailout for the airline industry covers around two-thirds of overall labor costs through September.
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Estimates suggest that up to a third of the sector’s jobs – roughly 750,000 pilots, flight attendants, baggage handlers, mechanics and others – could disappear.
A report published by The Guardian says airline job losses could be on scale of 1980s mining industry.
The grounding of air travel during the coronavirus pandemic could prompt a jobs crisis in British aviation.
This could be on the scale of the coal mining industry’s collapse during the 1980s, a report by the New Economics Foundation (NEF) warned.
The biggest U.S. carrier (AA) has secured USD6bn dedicated to payroll
support and a separated USD5bn federal loan.
Atlanta-based Delta has received USD5bn in U.S. payroll aid. It is also applying for an USD5bn federal loan but has until September to decide whether to take it.
More than a third of both airlines’ workforce – around 40,000 people – have
taken unpaid leave or voluntarily taken time off ranging from one to
several months.
The U.S. discounter Southwest has received USD3bn in federal aid for payroll support. It will apply for an additional USD3bn US loan but won’t decide until the fall whether to use it.
About 10,000 workers have taken voluntary leave or partial-pay options. Finally, United has just got USD5bn in U.S. grants and low-interest loans, and has applied to borrow up to USD4.5bn from the U.S. Treasury.
Bracing for a more prolonged travel slump than its domestic competitors do, United will cut 30% of its managerial and administrative jobs when government restrictions lift in October.
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