US aviation sector cuts more jobs amid travel meltdown
WASHINGTON: The ongoing US travel crisis is causing thousands of job cuts as the aviation sector waits for passengers to return to the skies but braces for years of lower demand because of the Coronavirus pandemic.
US airlines are slashing hundreds of thousands of flights, cutting schedules by 80per cent or more through at least June and parking thousands of jets as demand for tickets has plunged by about 95 per cent. Airlines are requiring facial coverings and implementing new cleaning procedures to try to convince passengers it is safe to fly again, but also fear the weakened economy may further drag down demand.
Late Friday, Spirit Aerosystems said that in response to lower production rates from Boeing Co and Airbus SE it would layoff 1,450 workers in Kansas.
“This sudden drop in air travel has forced our customers to adjust to lower demand from airlines, many of which are seeking to defer or cancel airplane orders,” Spirit Aerosystems Chief Executive Tom Gentile told employees in an email seen by Reuters. “All indications right now tell us this lower demand for new commercial airplanes is likely to last for several years.”
On Wednesday, Boeing Co announced it would cut some production rates and eliminate about 16,000 jobs worldwide, or 10per cent of its workforce by year end.
Boeing Chief Executive Dave Calhoun said he expects it will “take two to three years for travel to return to 2019 levels and it will be a few years beyond that for the industry to return to long-term growth trends.” The cuts in some areas, such as commercial airplanes, will be more than 15per cent, Boeing said.
Delta Air Lines Inc said
last week it does not expect air travel to recover for two or three years. More than 37,000 Delta employees have volunteered to take unpaid leave lasting from one month to a year. American Airlines Chief Executive Doug Parker told Reuters in an interview on Thursday that the airline will be “smaller than we intended to be certainly into 2021.”
Labor union SEIU said Thursday at least 13,000 union members at airports have been
laid off and another 1,000 layoffs are planned. The US Treasury has not yet awarded $3 billion in payroll assistance cash grants approved by Congress for airport contractors such as baggage handlers and airplane caterers.
US airlines last month collectively were awarded $25 billion in Treasury cash grants but as a condition must not fire workers or reduce through Sept. 30.
Numerous airlines have warned that without a dramatic turnaround in passenger numbers they will be forced to make new significant cuts before year end.
Jpmorgan Chase said in a research note on Friday that “October 1st is likely to emerge as one of the darkest days in history for airline labor” — though it noted that Congress could opt to extend additional assistance.