Thursday 28 May 2020 3:11 pm

Easyjet to axe 30 per cent of staff as coronavirus hits airline sector

Budget airline Easyjet today said it would cut up to 30 per cent of its staff and reduce its fleet in preparation for an expected slowdown in flights in the aftermath of coronavirus.

Easyjet said it would launch a consultation with staff in the upcoming days.

Read more: British Airways to axe a quarter of pilots amid 12,000 job cuts

The airline said it does not expect demand to return to 2019 levels for three years in line with projections from the International Air Transport Association (IATA).

Easyjet said its capacity in the fourth quarter was expected to be around 30 per cent of what it was in the final quarter of 2019.

It said it expects its fleet size at year end 2021 to be at the bottom end of its fleet range at about 302 aircraft, 52 aircraft lower than the anticipated fleet size for 2021 which was previously reported to the market.

The airline is resuming flights on 15 June, initially with a reduced schedule, mainly serving domestic customers in the UK and France.

The airline said it would add further routes “as customer demand increases and government restrictions across Europe are relaxed”.

Read more: Easyjet finance chief resigns after surviving Stelios coup

Easyjet chief executive Johan Lundgren said: “We realise 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.

“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. Although we will restart flying on 15 June, we expect demand to build slowly, only returning to 2019 levels in about three years’ time.

“Against this backdrop, we are planning to reduce the size of our fleet and to optimise the network and our bases.

“As a result, we anticipate reducing staff numbers by up to 30 per cent across the business and we will continue to remove cost and non-critical expenditure at every level. We will be launching an employee consultation over the coming days.

“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.”

Easyjet shares rose eight per cent to 771p this morning.

The British Airline Pilots Association (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.

“Easyjet has not discussed its plans with BALPA so we will wait and see what impact there will be in the UK. But given Easyjet is a British company, the UK is its strongest market and it has had hundreds of millions in support from the UK taxpayer, I can safely say that we will need a lot of convincing that Easyjet needs to make such dramatic cuts.

“Indeed, Easyjet’s own projections, though on the pessimistic side, point to recovery by 2023, so this is a temporary problem that doesn’t need this ill-considered knee-jerk reaction.”

Read more: Stelios accuses Easyjet of ‘voting fraud’ after failing to oust management

Easyjet job cuts could be sign of things to come

Neil Wilson, chief market analyst at Markets.com, said: “Easyjet is planning to reduce its fleet by 51 and cut up to 30 per cent of staff. This is the big fear playing out – temporary furlough becomes permanent firing once businesses figure out that demand has vanished. Whilst airlines will feel this more than just about any other sector, this trend will be seen in a wide range of industries, albeit to a lesser extent.

“Shares in EZJ rose eight per cent – cost cuts are welcome of course for investors, but also the indication of running at 30 per cent of capacity over the summer is better than had been feared. Efforts by the likes of Greece and Spain to salvage the summer season will help a lot. IAG and Ryanair shares rose two-to-three per cent.”

Easyjet said its flights would resume with a range of measures in place aimed to stop the spread of coronavirus.

Measures introduced included requiring customers and crew to wear masks, enhanced aircraft cleaning, availability of disinfectant wipes and hand sanitiser and initially, no onboard food service.

British Airways previously announced it was cutting up to 12,000 jobs as the global pandemic ravages the airlines industry.

Read more: Easyjet woes grow after it is hit with massive group action claim over data breach

Easyjet row rumbles on

Easyjet’s management team has come under sustained pressure from its founder and largest shareholder Sir Stelios Haji-Ioannou who wants the airline to cancel a deal to buy 107 Airbus planes for £4.5bn which he says puts the future of the business at risk.

Haji-Ioannou was defeated in a shareholder vote he pushed for to oust the management team last week.

Today Haji-Ioannou blasted Easyjet’s management for continuing with the Airbus deal while slashing staff.

“So the scoundrels at Easyjet have spent the last two months lying through their teeth as to why they must keep paying Airbus for 107 additional planes and now today telling 30 per cent of Easyjet staff that they will lose their jobs. Why don’t they just stop paying Airbus first?” Haji-Ioannou said.

“Ten weeks ago I was telling the scoundrels to go for a smaller fleet. Instead they have continued to line the Airbus wallet and now the scoundrels make employees carry the can. If the airline needs to be 30 per cent smaller in staff numbers then it needs to have 30 per cent fewer aircraft (on a March 2020 fleet size of 337), not 107 more.”

Share:
Tags: