Coronavirus: More airlines brace for job cuts, says Iata

About 45% of the global carriers have reported having already reduced their staff numbers in the second quarter of 2020

  
The International Air Transport Association (IATA) logo is seen at the International Tourism Trade Fair ITB in Berlin, Germany, March 7, 2018.

The International Air Transport Association (IATA) logo is seen at the International Tourism Trade Fair ITB in Berlin, Germany, March 7, 2018.

REUTERS/Fabrizio Bensch

The international aviation turmoil triggered by the Covid-19-inflicted travel restrictions will be forcing more airlines to downsize their staff significantly over the next 12 months, the International Air Transport Association (Iata) said.

"With the recovery in demand likely to be slow, 55 per cent of respondents expect to have to decrease employment levels over the coming 12 months," Iata said in a statement following a quarterly business confidence survey of more than 300 airlines.

About 45 per cent of the global carriers, including the UAE operators Emirates, Etihad Airways and Air Arabia, have reported having already reduced their staff numbers in the second quarter of 2020 due to cost-cutting measures following the pandemic.

On Thursday, Tony Douglas, group CEO, Etihad Aviation Group, said that due to the severity of the situation facing the industry, the airline has been forced to redesign the organisation around the need to make redundancies from its workforce across several areas of the business to ensure future continuity. Temporary company-wide salary sacrifices of 25 per cent to 50 per cent were also introduced.

"Etihad, like all major airlines, has had no choice but to embrace the ambiguity of the situation it has been thrown into, and with much sadness, we have had to make some extremely difficult decisions to reduce the size of the workforce by several thousands."

Even at the onset of the pandemic, Iata released an analysis showing that globally some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the crisis. Globally, the livelihoods of some 65.5 million people are dependent on the aviation industry, including sectors such as travel and tourism.

The latest survey by the Geneva-based Iata, which represents about 290 airlines comprising 82 per cent of global air traffic, shows that 57 per cent of the carriers expect passenger yields to fall over the next 12 months and think ticket prices could fall due to the weak recovery in demand. About 19 per cent expect to see a gradual increase in fares once the balance between supply and demand is restored.

Iata expects air traffic to return to pre-crisis levels in 2024 and estimates that traffic will fall by 63 per cent in 2020 compared to 2019, with a shortfall of $419 billion in the sector due to the coronavirus crisis.

Europe and the Asia-Pacific region are expected to be the first to return to 2019 traffic levels, while the Americas are expected to experience a slower recovery, according to Iata.

The aviation sector has been hit hard by the crisis, with almost all aircraft fleets grounded and tens of thousands of jobs lost.

The US company United has announced that it could lay off up to 36,000 employees. American Airlines has cited the figure of 25,000 redundancies.

Germany's Lufthansa wants to cut 22,000 jobs, Air Canada 20,000, British Airways 12,000, Air France-KLM up to 12,500, Australia's Qantas 6,000, Scandinavia's SAS 5,000 and Britain's easyJet 4,500.

LATAM, the largest airline in Latin America, has announced the loss of 2,700 jobs.

Virgin Australia announced Wednesday that it would close budget subsidiary Tigerair Australia and lay off 3,000 staff as it prepares to relaunch under new owners.

Virgin Atlantic has applied for bankruptcy protection in the US, court filings showed Wednesday, as the British airline - which has not flown since April due to the virus - seeks to tie up a rescue deal in Britain.

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