European Aviation Sector Witnessing ‘Tsunami’ Of Job Cuts, US Carriers Could Follow Suit

The severe hit of the travel restrictions and lockdown because of the novel coronavirus pandemic on the global airline industry has forced airlines to scale back their businesses. The airlines also do not see a quick recovery from the coronavirus pandemic and the prospect of air travelling reducing in the near future.

And in an effort to stem the flow of cash and reduce expenses and as the outlook of the medium-term outlook for aviation sector deteriorates rapidly, top airlines of Europe have said just this week that they will need to ace tens of thousands of jobs.

As many as 32,000 jobs in total could be jointly cut by Ryanair, Lufthansa, British Airways, Scandinavian Airlines and Air France-KLM, in an effort by the companies to shrink their businesses and adapt to an industry that potentially will take a number of years to completely recover to the pre pandemic levels.

Airlines are hopeful that the blow for employees could be somewhat cushioned by the hiring freezes, part-time working and early retirement. However, that is not enough cause for   optimism.

“We are currently facing the greatest challenge of our recent history,” Lufthansa CEO Carsten Spohr said in remarks posted on the German aviation group’s website on Friday. “We are fighting for the future of this company and the future of the roughly 130,000 employees of the Lufthansa Group,” he added.

Brian Strutton, general secretary of the British Airline Pilots’ Association said in a statement that aviation workers face a “tsunami of job losses”. He added that the industry “will be devastated” without help from government.

On Tuesday, British airways said it might need to axe more than a quarter of its workforce while Ryanair had already announced 3,000 job cuts earlier on Friday.

“What we are facing as an airline … is that there is no ‘normal’ any longer,” British Airways CEO Alex Cruz said in a letter to staff according to reports. “The scale of this challenge requires substantial change so we are in a competitive and resilient position… to withstand any longer term reductions in customer demand,” he added.

A number of larger airline companies in Europe and the United State are seeking government bailout packages to survive.

Lufthansa’s Spohr said that the airline is in “intensive talks” with the German government about financial support. “The future of Lufthansa is currently being decided. The question is whether we can avoid bankruptcy with the support of the governments of our four home countries,” Spohr said.

Airlines in across the Atlantic, in the US, are also reporting billions of dollars in losses for the first quarter. While US airlines cannot engage in jobs cuts because of a condition in the $25 billion bailout package that was given to them by the US government, that ban is only applicable till September 30.

Analysts say that large chunks of job cuts among US airline companies also seem inevitable because of the size of the aviation sector itself is expected to get significantly smaller for a number of years.

Salary cuts or unpaid leave, some for as long as nine months, have already been implemented for about 100,000 employees at the four major airlines alone — American, United, Delta and Southwest.

“We will indeed, irrespective of where demand is, go into the fall with more team members than we have work for,” American Airlines CEO Doug Parker told investors on Thursday. “If demand remains significantly diminished on October 1, we simply won’t be able to endure this crisis without implementing some of the more difficult and painful actions,” United Airlines CEO Scott Kirby added Friday, making reference to “involuntary furloughs.”

(Adapted from CNN.com)



Categories: Creativity, Economy & Finance, HR & Organization, Regulations & Legal, Strategy, Sustainability, Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: