Airlines need more layoffs as travel demand remains muted: IATA

Airlines need to cut more jobs to reduce costs as travel demand remains muted in the wake of the coronavirus pandemic, according to the International Air Transport Association. “To maintain last year’s level of labour productivity, measured by ASKs (available seat kilometres) per employee, employment would need to be cut 40 per cent. Further job losses or pay cuts would be required to bring unit labour costs down to the lowest point of recent years,” Iata’s directorgeneral and chief executive Alexandre de Juniac said. Most airlines across the globe have either furloughed their workers or cut jobs as revenues ground to a halt when flights across the world were grounded to stem the spread of the pandemic. Although international travel has resumed in most countries, demand remains weak as a result of quarantine measures and fears of infection. Cathay Pacific Airways earlier this month announced that it will cut about 5,300 jobs based in Hong Kong and close its Cathay Dragon unit as part of a sweeping overhaul of the city’s flag carrier triggered by the halt in air travel due to the coronavirus pandemic. American Airlines, United Airlines, British Airways, Lufthansa and many other carriers have all announced plans to cut thousands of jobs in recent months. “The industry has to get smaller at least for the next 12 to 18 months given the muchreduced outlook for travel and revenue and there must be some way of doing that without completely draining airlines of their cash reserves,” Brian Pearce, IATA's chief economist, said.