EasyJet: announces cut 4,500 positions, one third of the workforce

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At the moment the group does not plan to proceed with a capital increase, but in any case the re-capitalization remains an open option if the flight situation remains so complicated.

by Chiara Di Cristofaro

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(AFP)

At the moment the group does not plan to proceed with a capital increase, but in any case the re-capitalization remains an open option if the flight situation remains so complicated.

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The British lowcost airline easyJet has announced its intention to cut around 4,500 positions, or around a third of its workforce, in response to the impact of the Coronavirus on the group’s finances and the new context that will determine the resumption of activities . EasyJet has simultaneously announced that it will launch a consultation process with employees before making the cuts. The share on the stock market marks one of the best performances in London with a rise that reached 7%.

For now, no capital increase
EasyJet has also announced that it will launch a consultation process with employees before making the cuts. EasyJet’s decision aligns with that of competitors British Airways, Ryanair and Virgin Atlantic, who recently announced job cuts. The CEO today specified that at the moment the group does not plan to proceed with a capital increase, even if the recapitalization remains a hypothesis on the table in the event that the situation of the market for air flights does not improve.

Fewer flights, the aircraft fleet will also be reduced
“We know this is a very difficult time and we have to make very difficult decisions that affect our employees, but we want to protect as many jobs as possible in the long run,” said Johan Lundgren, CEO of lowcost. In support of the decision to reduce the workforce, the group underlines the fact that the aircraft fleet will also be reduced due to the decline in activity, but also due to the need to optimize the network and its bases, improve productivity and put more efficient working methods are in place to remain profitable.

Booking data is “encouraging”
EasyJet also confirms a gradual resumption of flights from June 15, especially domestic flights to the UK and France. The booking data is “encouraging” and the demand for summer 2020 indicates an improvement in activity. EasyJet estimates, however, that flight capacities between July and September will only amount to 30% of those of summer 2019. A forecast for a return to normal is estimated no earlier than 2023. Reservations are higher than last year for next winter, due to travelers who postponed canceled flights during the pandemic.

(Il Sole 24 Ore Radiocor)



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