The Covid-driven crisis hitting the airline industry is set to deepen with at least seven million aviation and tourism jobs now at risk, according to a leading industry body.
The International Air Transport Association (IATA) said the near-term outlook for recovery in the European aviation market “remains highly uncertain” due to concern over a second wave of the pandemic and the broader general knock-on negative economic impact that would present.
All of Europe’s major carriers have either flagged or started implementing job cuts in a bid to slash costs in the face of a near total wipe out of air passenger business due to the virus.
Ryanair has flagged up to 3,000 job cuts because of the crisis and has warned of more if there is a pronounced second wave of the virus. Aer Lingus is seeking to lay off up to 500 of its 4,800-strong staff. The airline is also reviewing its bases at Cork and Shannon airports, where it employs around 350 people, evenly split between the two locations.
The DAA, which operates Cork and Dublin airports, is also seeking 750-1,000 job cuts across the two airports and at its head office in order to stem mounting losses from the shutdown of air travel.
Elsewhere, British Airways – also owned by Aer Lingus’ parent IAG – is cutting 12,000 jobs and UK rival EasyJet has flagged 4,500 job losses due to Covid.
IATA said that while there has been an increase in flight numbers in recent months, the total number across Europe is still down by more than 50% compared to the same point last year. It said passenger numbers are likely to fall by around 60% this year, which would be the equivalent of 705 million less passenger journeys than were made in 2019.
The group’s forecast for seven million job losses across aviation-supported tourism - including airports, hotels, car hire businesses and everything which relies on air travel for revenue - is up from six million just two months ago.
“It is desperately worrying to see a further decline in prospects for air travel this year, and the knock-on impact for employment and prosperity. It is vital that governments and industry work together to create a harmonised plan for reopening borders,” said Rafael Schvartzman, IATA’s regional vice president for Europe.
German airline Lufthansa has walked away from talks with union Verdi over a package to cut staff costs and said it would only return to the negotiating table if Verdi offers significant labour cost savings. Last week, the airline put German workers on notice of compulsory lay-offs, saying the slump in air travel and slow progress in union negotiations meant cuts were unavoidable. Verdi, which is negotiating on behalf of 35,000 Lufthansa ground staff, said the airline was demanding unreasonable pay cuts.
Holiday group TUI is looking at a possible rights issue or divesting parts of its business to bring down its high debt. The group has also reported a €1.1bn loss for the three months to the end of June. Earlier this week, TUI tapped the German government for an extra €1.2bn loan on top of a €1.8bn loan in April.