Global Aviation on its Knees…

Global Aviation - Aviators

With Covid-19 raging through 2020 the repercussions to the Global Aviation sector have been nothing short of a catastrophe. With airplanes being grounded across the world, we are seeing massive staff retrenchment in aviation as well as other related sectors. Since leisure travel is now a thing of the past and flights have been drastically reduced, the hospitality and tourism industry have also been adversely affected further dampening the global economy.

Job losses across the sector are mounting and the numbers are disheartening. Boeing announced that it would lay off 10% of its staff  worldwide, Airbus has planned global staff reduction by 11% which is tantamount to 15,000 people in 2021, GE’s Aviation unit plans on cutting workforce by 25%.

The United States has been badly hit with 80 percent curtailment of flights., even though they are beginning to open up now, 37000 Delta employees have been asked to take voluntary leave. United Airlines has reduced work hours of 15000 employees by 25%  and further wants to lay off about 4457 pilots which constitutes one third of its pilots.

Warren Buffet, who owned stock in some of the major US carriers like Delta, American, Southwest and United has sold his entire stake, booking a huge loss, since shares in this sector plummeted to record lows.

Initially, British Airways had announced retrenchment of 12000 employees including over 1100 pilots, and also considered giving the entire workforce zero hour contracts, however now they are talking about payouts between 20% to 30% for  both cabin crew and pilots, with some terminations too.

Ryan Air, CEO had earlier announced that they were planning on terminating contracts of 3000 employees mostly pilots and crew , in a positive turnaround they too are now pushing for a 5% to 20% salary cut to try and save as many jobs as possible.

Lufthansa Group has planned 22,000 job cuts including 600 pilots and 2600 cabin crew. Lufthansa pilots have already made an offer to take a cut of 45%  for 2 years as per their union.

Airlines like Norwegians who were in heavy financial debt have restructured their entire management in June  with a state aid guarantee of NOK 3 billion and are stable for the moment.

Middle eastern airlines Emirates has fired 600 pilots in May and 800 pilots in July, mostly on the Boeing 777 and Airbus 380 fleet, and about 6000 to 7000 cabin crew as of today. Emirates has also imposed a 50% pay cut for its entire crew (4300 pilots & 22,000 cabin crew) till September and are still planning to let go of almost 1/3 of them. So overtime, Emirates Group which also includes Dnata, a ground handling company could reduce their entire workforce by 30,000 in the days ahead.

Meanwhile Etihad has fired 1600 cabin crew members and extended salary reduction by 25% for junior staff and 50% for employees at managerial levels and higher till September.

Qatar Airways, which has a strength of about 47000 employees on its payroll, has this week fired all pilots above the age of 60 and also experienced captains who have been with Qatar for atleast 10 years since their CTC is very high. They have also  given a 15% to 25% wage cut to the other employees. 

However, since many of the mid-eastern carriers are government or monarchy owned they will survive and get back to the skies sooner than expected.

Air Italy, Fly be, German Wings, South African Airways, Avianca Peru, Latam Argentina, Nokscoot Thailand, Tiger Air Australia are all bankrupt.

Like Norwegian, there are atleast a dozen more airlines on the anvil of shutting down or bankruptcy, and cannot survive without government aid.

We’ll have to wait and watch if the governments intervene, the question is when and what kind of package, stimulus or relief will the aviation sector get. Hopefully this will happen before too many jobs are lost or Airlines forced into bankruptcy.

As per IATA (International Air Transport Association)  air travel has fallen by 90% in Europe and the USA, and is unlikely to rebound to pre crisis level till 2030. “Financially 2020 will go down as the worst year in the history of aviation. On an average every day of this year will add $230 million to industry losses. That’s why government financial relief was and remains crucial as airlines burn through cash.” – Alexandre de Juniac, IATA’s Director General and CEO.

The statistics are gloomy, but we hope that these dark clouds lift soon and Aviation sees blue skies again!

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