British low-cost airline easyJet is planning a layoff of up to 4,500 jobs and shrinking its fleet to adjust to the smaller travel market, which is forecast to not emerge from the coronavirus crisis anytime soon.
EasyJet employs about 15,000 people in eight European countries, the latest airline company to announce job cuts due to the travel restrictions amounting to coronavirus pandemic.
The airline industry has been on its knees since the outbreak of coronavirus with many even looking at bankruptcy as unavoidable. Most of the airlines have been forced to cut jobs, including more than 15,000 in Britain, as they prepare for a market that is not forecast to return to 2019 levels until 2023.
EasyJet recently said it would launch a consultation process with staff. It also plans to shrink its fleet by 15% to 302 planes by the end of 2021 and to cut costs through deals with airports, maintenance suppliers and in marketing.
“Exactly the kind of overhaul the cost base needs,” Bernstein analyst Daniel Roeska said about EasyJet’s cuts, which go deeper than those of Ryanair and Wizz Air, who have said they will lay off 15% and 19% of staff respectively.
According to a Reuters report, EasyJet said it expects to be flying around 30% of its capacity by the fourth quarter, which leaves it trailing Ryanair which is planning to fly 40% in July.
“The leverage to growing market share over the next two years seems to rest with Ryanair and Wizz, who see their cost bases as allowing them to exploit this crisis,” Goodbody analyst Mark Simpson said.
EasyJet Chief Executive Johan Lundgren said that job cuts would ensure EasyJet emerges as “a more competitive business.” Around 8,000 of its staff are based in Britain.
Lundgren told reporters that EasyJet was talking to the British government about a 14-day quarantine rule, which airlines say will further stifle any travel recovery.
