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Bloomberg
EasyJet Plc will cut thousands of jobs representing as much as 30% of the workforce to cope with a long-term hit to demand from the coronavirus crisis.
Europe’s second-biggest discount carrier will begin employee consultations in coming days, it said in a statement
on Thursday. The Luton, England-based firm has about 15,000 workers, suggesting 4,500 posts are at risk.
EasyJet is slashing costs in preparation for a return to service in a European market greatly diminished by the pandemic. Rivals British Airways and Ryanair Holdings plan to let go a combined 15,000 workers, with the UK’s plan to quarantine arrivals hurting chances for a recovery in the busy London area. In Scandinavia, SAS AB said it will scrap 5,000 jobs and may need more state aid, while Norwegian Air Shuttle ASA may run out of cash in the third quarter.
The region’s biggest carrier, Deutsche Lufthansa, has been struggling for weeks to pin down a $10 billion bailout.
EasyJet CEO Johan Lundgren said on a media call that there are no plans to raise additional equity, though the situation remains fluid.
“That is something that we will continue to look into as a whole range of additional things that we are considering,†he added.
Slow Recovery
Lundgren sees a slow recovery from the crisis, with demand “only returning to 2019 levels in about three years’ time.†The carrier will operate 51 fewer jets than planned by the end of 2021 and also rationalise its network of European bases.
Flights will resume on June 15 on a handful of routes, mainly within Britain and France, the company said. Capacity is set to be down 30% on usual levels in the three months through September, and though winter bookings are ahead of last year, that’s partly as a result of people changing flight dates.
Sanford C Bernstein analyst Daniel Roeska called the carrier’s plans and outlook “cautious,†especially when compared with Ryanair, which will return capacity faster and anticipates an earlier rebound in demand. The fleet plan is also at the bottom end of a range set out in mid-April, he said in a note.
Investors had been waiting on news of EasyJet’s payroll plans after the carrier was one of the few European airlines not to have announced layoffs. The company’s response was complicated by internal strife as founder and No. 1 shareholder Stelios Haji-Ioannou sought to unseat four executives including Lundgren. The entrepreneur wants to block the purchase of 100 Airbus jets he says the carrier neither needs nor can afford.
EasyJet has already deferred delivery of 24 planes, helping to reduce near-term expenditure by more than $1.2 billion.