MORE BUMPS AHEAD
Air traffic will not recover until 2024
Most airlines are considering downsizing their staff over the next 12 months, IATA says.
GENEVA/COPENHAGEN: Most airlines are considering downsizing their staff over the next 12 months due to the coronavirus crisis, the International Air Transport Association says, citing an internal survey.
“With the recovery in demand likely to be slow, 55% of respondents expect to have to decrease employment levels over the coming 12 months,” global aviation body IATA said in a statement on Wednesday following a quarterly business confidence survey of more than 300 airlines.
Some 45% reported having already reduced their staff numbers in the second quarter of 2020 due to costcutting measures following the Covid-19 pandemic.
Meanwhile 57% expect passenger yields to fall over the next 12 months and think ticket prices could fall due to the weak recovery in demand.
Some 19% expect to see a gradual increase in fares once the balance between supply and demand is restored.
Geneva-based IATA represents some 290 airlines comprising 82% of global air traffic.
It expects air traffic to return to precrisis levels in 2024 and estimates that traffic will fall by 63% 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.
United Airlines has announced that it could lay off up to 36,000 employees. American Airlines has cited the figure of 25,000 redundancies.
Lufthansa wants to cut 22,000 jobs,
Air Canada 20,000, British Airways 12,000, Air France-KLM up to 12,500, Qantas 6,000, SAS 5,000 and easyJet 4,500.
LATAM, the largest airline in Latin America, has announced the loss of 2,700 jobs.
Virgin Australia announced on 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 United States, court filings showed on Wednesday, as the British airline — which has not flown since April due to the virus — seeks to tie up a rescue deal in Britain.
In a separate development, Copenhagen Airport A/S said on Wednesday that it might lay off a quarter of its staff as it is forced to confront the massive drop in passengers due to the coronavirus pandemic.
The operator of Scandinavia’s largest airport said the lay-off of 650 employees was being considered “in order to secure its long-term competitive strength.”
Copenhagen Airport said it would open discussions with union representatives to determine the final number of jobs to be cut.
“It’s very sad that we’ll have fewer employees at CPH,” chief executive Thomas Woldbye said in a statement, referring to the airport using its international IATA code.
“Our goal during the crisis has been to maintain as much activity and retain as many jobs as possible at the airport,” he added.
Copenhagen Airport lost about €31 million in the first half of the year and it expects an even deeper loss for the second half.