An EasyJet Airbus A320 aircraft is seen at Malpensa Airport near Milan, Italy, October 3, 2018.
Stefano Rellandini | Reuters
British budget airline easyJet announced it would reduce its workforce by around a third, as the coronavirus pandemic continues to weigh on the tourism industry.
The company said it was looking to cut employee numbers by 30% to reflect its reduced airplane fleet and “improved productivity,” adding that it would launch a consultation with its workers in the coming days.
EasyJet said it would take decisive action to “remove cost and non-critical expenditure from the business at every level,” which would also see cost-cutting measures being taken in areas such as airport contracts and marketing.
With the Covid-19 crisis taking a toll on travel, the airline has signed two loans worth £400 million ($326 million), issued £600 million in commercial paper and accessed $500 million through a revolving credit facility.
EasyJet also said on Thursday it was allowing its aircraft to lease, which was expected to generate proceeds of between £500 million and £650 million for the firm. Its funding initiatives as a whole were expected to generate additional liquidity of £2 billion.
The company warned, however, that it did not expect demand to return to 2019 levels until 2023, and said it was not possible to give full-year guidance amid uncertainty in market conditions.
CEO Johan Lundgren said in a note to investors that the company was making “very difficult decisions,” but wanted to protect as many jobs as possible in the long term.
“We are planning to reduce the size of our fleet and to optimize the network and our bases,” he said.
“As a result, we anticipate reducing staff numbers by up to 30% across the business … We want to ensure that we emerge from the pandemic an even more competitive business than before, so that EasyJet can thrive in the future.”
EasyJet, which plans to resume flights on June 15, is the latest in a slew of airlines to announce job cuts amid the pandemic.
Tui announced earlier this month that it would cut up to 8,000 jobs, calling Covid-19 “the greatest crisis the tourism industry has ever faced.”
It came after Virgin Atlantic announced it would cut more than 3,000 jobs to mitigate the “devastating” impact of the Covid-19 pandemic.
Meanwhile, United Airlines reportedly said in a recent company memo that it was planning to cut management by 30%, and British Airways has warned as many as 12,000 of its workers could be laid off.
The head of the International Air Transport Association told CNBC this month that demand for air travel had dropped more than 90% in Europe and the U.S. since the start of the pandemic.