Tuesday, 30 June 2020

easyJet consulting on over 2000+ job losses

The UK's leading budget carrier easyJet is poised to close a number of bases including London Stansted, London Southend and Newcastle in the UK.

It follows an announcement the airline issued in May advising it might need to lay off up to 30% of its workforce as it revises its operation in the wake of the coronavirus COVID-19 pandemic.

The airline confirmed that it had started formal consultation on proposals with employee representatives including the BALPA and UNITE unions on all of its UK based pilots and crew today.

"We have also informed all employees who may be directly affected by these proposals and will be providing full support to our people during this difficult time. We are fully committed to work closely with our employee representatives during these consultations with the aim of minimising job losses as far as possible. " the carrier said in a statement.

Johan Lundgren, easyJet CEO, said: "Unfortunately the lower demand environment means we need fewer aircraft and have less opportunity for work for our people - we are committed to working constructively with our employee representatives across the network with the aim of minimising job losses as far as possible.

"These proposals are no reflection on our people at Stansted, Southend and Newcastle, who have all worked tirelessly and have been fully committed to providing great service for our customers.”

easyJet employs around 2300 pilots in the U.K, over 80% of which are still on furlough, so 80% of their wages are being paid for by the British Government.  BALPA confirmed that it had been told that 727 pilots are at risk of being made redundant by the carrier. The pilots union also expressed its surprise at the scale of the cuts, "BALPA is shocked at the size of potential job losses which equates to nearly 1-in-3 of easyJet pilots in the UK, which it says doesn’t add up." it said in a statement on Tuesday. 

Brian Strutton, BALPA General Secretary, said: “We know that aviation is in the midst of the COVID crisis and we had been expecting easyJet to make an announcement of temporary measures to help the airline through to recovery. 

“But this seems an excessive over-reaction and easyJet won’t find a supply of pilots waiting to come back when the recovery takes place over the next two years. easyJet paid £174m out to shareholders, got agreements to furlough staff to protect cash, got £600m from the Government, has boasted of having £2.4bn in liquidity, and ticket sales are going through the roof so fast they cannot get pilots back off furlough quickly enough – so why the panic? It doesn’t add up."

The union is correct,  easyJet is in a very comfortable position within the aviation industry,  it has nearly £2.5 billion in cash reserves, which according to the airlines own estimations is expected to rise to £3.1 billion by the end of the year. The Government COVID Corporate Financing Facility (CCFF) facilitated a loan of £600 million. It is continuing with a multi-million pound new HQ build at Luton and at the start of this coronavirus crisis, its pilots took pay cuts equivalent to up to 76% of their normal monthly salary in order to help the airline's cash position.  On top of that,  the airline paid out share dividends in March this year of around £175 million. 

Unite, the UK’s leading aviation union has said the carrier is intending to make 1,290 cabin crew redundant and described the news as yet another ‘massive blow’ for this battered industry. Between attacks on the government, its national officer for civil aviation Oliver Richardson said: "This is yet another massive blow to the aviation industry and our thoughts are with workers who face losing their jobs through no fault of their own.

There is no need for this announcement at this time, especially since easyJet has taken a multi-million pounds government loan which it ought to be putting to use defending UK jobs.

 "This is a company with its priorities all wrong.  It has paid a multi-million dividend to its shareholders, borrowed hundred of millions from the government to buy new aircraft and has fully utilised the jobs retention scheme.  It absolutely should not be allowed to make huge redundancies a few weeks later."

Newcastle Airport said it was "saddened to hear of possible job losses and the significant impact this would cause. - This is very disappointing for the airport, airline and the North East as a whole and we sympathise with everyone affected by this announcement."

The on the face of it, the airline does seem more interested in cutting jobs than decreasing dividends for shareholders and is happy to take government money despite having no real need to do so. However,  one thing is clear,  these are not the last of the job losses to come from easyjet in the not too distant future, many in the industry are expecting many more positions to be axed in the UK by the airline. The future used to be orange,  now it is looking a lot less bright and more a few shades of grey. 

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