EasyJet calls for urgent UK government support to airline industry
EasyJet has called on the British government to urgently provide airlines with a bespoke package of support measures, warning that aviation is facing the most severe threat in its history.
The airline said it expects to report a full-year loss for the first time in its history, forecasting a pre-tax loss of between £815m and £845m for the last 12 months.
EasyJet said it carried over 9 million passengers between July and September, equivalent to 38% of capacity planned before the pandemic. It burned through almost £700m in cash during that period.
The low-cost carrier said it is focusing on profitable flying during the winter season, operating just a quarter of its usual schedule between October and the end of the year, in order to minimise its losses and cash burn.
EasyJet said it had raised more than £2.4bn in cash since the start of the pandemic, including a £600m loan from the Treasury and Bank of England’s emergency coronavirus fund which it secured in April with its fleet grounded.
Airline and aerospace job cuts on back of Covid-19 crisis
Airbus – 1,700 jobs
30 June: The European planemaker announced plans to cut 15,000 jobs, including 1,700 in the UK, as it warned the coronavirus pandemic had triggered the “gravest crisis” in its history.
Swissport – 4,500 jobs
24 June: Swissport, which handles passenger baggage and cargo for airlines, has begun a consultation process to make 4,556 workers redundant, more than half of its 8,500 UK workforce.
Bombardier – 600 jobs
11 June: The Canadian planemaker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.
Rolls-Royce – 9,000 jobs
3 June: The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in sites in the UK.
easyJet – 4,500 jobs
28 May: The airline has announced plans to cut 4,500 employees, or 30% of its workforce, as it prepared for lower demand.
Tui – 8,000 jobs
13 May: Travel company Tui plans to cut up to 8,000 jobs worldwide in response to the coronavirus chaos engulfing the tourism industry.
Virgin Atlantic – 3,000 jobs
5 May: Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.
Ryanair – 3,000 jobs
1 May: The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.
Aer Lingus – 900 jobs
1 May: The Irish flag carrier, part of International Airlines Group (IAG), plans to cut 900 jobs.
British Airways – 12,000 jobs
28 April: The UK flag carrier plans to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline, with cabin crew, pilots and ground staff affected.
Meggitt – 1,800 jobs
23 April: British engineering company Meggitt plans to shed about 1,800 jobs making parts for commercial aviation.
Safran – 400 jobs
23 April: French aircraft seat maker Safran made 400 job cuts at its UK operations, including a plant in Cwmbran.
Flybe – 400 jobs
5 March: Flybe, Europe’s largest regional airline, collapsed into administration with the loss of more than 2,000 jobs, less than two months after a government bailout.
EasyJet has described itself as well-positioned to weather the current environment and for its business to recover once government travel restrictions are eased.
However, the carrier has signalled it may need further financial support from the state if flying continues to be disrupted by coronavirus, as first reported by Sky News.
The airline said it continues to review its liquidity position on a regular basis and would “continue to assess further funding opportunities, including sale and lease backs, should the need arise”.
Johan Lundgren, easyJet’s chief executive, said the company had taken decisive action to minimise its losses, reduce cash burn and boost its liquidity to face the challenges presented to aviation by the pandemic.
“At the beginning of this year, no one could have imagined the impact the pandemic has had on the industry,” Lundgren said.
“EasyJet came into this crisis in a very strong position thanks to its strong balance sheet and consistent profitability. This year will be the first time in its history that easyJet has ever made a full-year loss”.
EasyJet is in the midst of a restructuring programme, with plans to cut up to 30% of its workforce and close some of its UK bases including at Stansted, Southend and Newcastle airports.
It has previously called on government to help airlines with measures such as the removal of air passenger duty for at least 12 months.
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