Yahoo Finance EasyJet plans to cut up to 30% of staff as Covid-19 hits demand
EasyJet plans to cut up to 30% of its employees in an attempt to save costs, as it expects to fly fewer planes when it returns to the skies after the coronavirus crisis.
Up to 4,500 of its 15,000-member workforce could lose their jobs and the airline will start a consultation process with employees in the coming days.
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EasyJet expects passenger demand to return slowly, reaching only 30% of capacity in the final quarter of the year compared with the final quarter of 2019. It does not expect demand to reach 2019 levels for about three years.
The airline plans to reduce its fleet of aircraft to 302 planes, 51 fewer than it had planned ahead of the outbreak of Covid-19.
It also intends to reduce costs by revising its contracts with airports and ground handling, reassessing what it spends on maintenance as well as renegotiating what it spends on marketing.
The carrier previously announced it would resume flights on a small number of routes from 15 June, with increased onboard safety measures, including the mandatory wearing of face masks, as it restarts flying after grounding its fleet on 30 March.
Johan Lundgren, easyJet’s chief executive, said the airline was focused on “doing what is right for the company and its long-term health and success”.
He added: “We realise 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.”
The British Airline Pilots’ Association (BALPA) criticised easyJet for not discussing its plans with the union and said it would need “a lot of convincing” that the airline needs to make “such dramatic cuts”.
The BALPA general secretary, Brian Strutton, said: “EasyJet staff will be shocked at the scale of this announcement and only two days ago staff got a ‘good news’ message from their boss with no mention of job losses, so this is a real kick in the teeth. Those staff have taken pay cuts to keep the airline afloat and this is the treatment they get in return.”
The airline is planning deeper job cuts than its low-cost rivals – Ryanair said it would lay off 15% of its staff, and Wizz intends to reduce its workforce by 19%.
EasyJet will initially restart domestic routes in the UK and France in June, along with flights from four destinations elsewhere in Europe, where it says there is sufficient demand to support profitable flying.
Further routes will be added in the following weeks, as and when passenger demand rises and lockdown measures ease further across Europe.
However, the airline would not fly to Italy if the government prolonged physical distancing rules on planes beyond 15 June, Lundgren said in an interview with an Italian newspaper.
“It would be impossible for companies to operate with only a third of the seats sold, it would be harmful to the recovery: the country risks falling behind,” hewas quoted by Corriere della Sera as saying on Thursday.
The airline said it was “not clear … what underlying scientific evidence there is” for the UK government’s decision to introduce a two-week quarantine for almost everyone arriving at ports and airports, including UK citizens, from 8 June.
Lundgren told journalists the UK was introducing restrictions just as they were being lifted in other parts of Europe. “How do you explain to British people that the Germans and other European nationalities are going to holidays in Greece and parts of Spain where there is less risk of being infected than in places in the UK? Why would they need quarantine? What’s the rationale behind that?”
The coronavirus pandemic halted the majority of air traffic across Europe and has put easyJet and its competitors under severe financial pressure. The airline said it was trying to reduce its costs and conserve cash but could not give guidance on its forecast financial results for 2020.
