© Fabrizio Bensch/ReutersAbout 4,000 of easyJet’s 9,000 UK staff will be furloughed for at least two months from 1 April.
The budget airline said it could not put a firm date on restarting commercial flights and 4,000 of its 9,000 UK staff will be furloughed initially for two months from 1 April.
Comment: Interestingly, according to Wiki, the word furlough was officially defined only recently:
The word furlough was first defined officially in the UK on 24 March 2020 in response to the Covid-19 pandemic. The government announced a new Coronavirus Job Retention Scheme to enable businesses to continue paying part of their employees' salary for those that would otherwise have been laid off.[12]
EasyJet also said it would seek to pay less for new aircraft after its founder, Sir Stelios Haji-Ioannou, threatened to call repeated shareholder meetings to remove directors until the airline reconsidered buying 107 new aircraft from Airbus. The new Airbus planes are a major part of easyJet's planned £4.5bn in capital expenditure up to 2023.
Haji-Ioannou, who along with his sister holds 32% of the company's shares, described the bill for new aircraft as "the main risk to survival of the company". His demands came in a letter sent to the easyJet chairman, John Barton, on Sunday.
In response to Haji-Ioannou, easyJet said it is "working with suppliers to defer and reduce payments where possible, including on aircraft expenditure".
The global airline industry is caught up in an unprecedented crisis, with companies laying off workers by the thousand, on the back of strict travel restrictions across most of the main air travel markets.
British Airways' owner, International Airlines Group, on Monday said it had extended a $1.38bn credit buffer by a year to June 2021. The latest agreement with its lenders meant it had access to €9.3bn in cash, cash equivalents and loans, which it could use to ride out the crisis.
However, the almost total loss of revenues threatens the survival of many airlines. Loganair, the Scottish regional carrier, on Monday said it would be seeking government assistance beyond that offered to all British companies, despite the government's insistence so far that it would not offer an industry-wide bailout.
Loganair's chief executive, Jonathan Hinkles, told BBC radio: "I do think, that like the vast majority of UK airlines, we will be going back to take up that invite for further conversation with the Treasury in the coming days because we have to."
Qatar Airways on Sunday said that it would eventually need state aid, despite being one of the few global airlines continuing to run commercial scheduled flights, mainly to allow people to return home.
However, easyJet on Monday insisted that it would not seek "bespoke" state aid after its chief executive, Johan Lundgren, said the airline might seek government loans on commercial terms, although the company did say it might use the government's Covid-19 corporate finance facility.
Haji-Ioannou added in his letter that he did not support easyJet applying for government loans and that it would not need to do so if the Airbus order were cancelled. He wrote that he would be willing to participate in an equity issue if the airline needed more cash.
EasyJet had focused on repatriating customers in recent days after travel restrictions came into force across most of its main markets. However, the last of 650 repatriation flights ended on Sunday.
Grounding the fleet removes "significant cost", easyJet said. The move also means that furloughed staff in the UK will be paid 80% of their salaries through the government's job retention scheme. There were separate arrangements with governments in other countries where easyJet staff are based, a spokeswoman said.
Many of the staff furloughed by easyJet, as well as Virgin Atlantic, will be drafted in to help in temporary "Nightingale" hospitals built to cope with a wave of thousands of expected coronavirus patients.
EasyJet has invited staff to volunteer for further training before helping out at the critical care field hospitals in London, Birmingham and Manchester, while Virgin will contact 4,000 of its staff who may have the relevant skills needed to provide help.
British and Irish air industry in crisis response
The UK government has warned that it will not give a sector-wide bailout for airlines struggling with the coronavirus lockdown. However, the chancellor, Rishi Sunak, indicated the government would consider support on a case-by-case basis.
- Virgin Atlantic, the airline founded by the billionaire Sir Richard Branson has asked the government for hundreds of millions of pounds of state aid. The long-haul passenger airline does not have the cash reserves to ride out months of grounded flights and almost all staff are on unpaid leave.
- British Airways' owner, International Airlines Group, has so far said it will not ask for state aid. IAG, which also runs Spain's Iberia and Vueling, and the Irish flag carrier Aer Lingus, filed an official complaint over the rescue deal offered to Flybe before it went bust.
- Loganair, the Glasgow-based airline with 650 employees, said its position providing government-protected services to remote Highlands and Scottish island destinations meant it could not shut down and it needed aid.
- Ryanair joined IAG in criticising the Flybe state aid and said it had €4bn (£3.5bn) in cash to tide it over. The EU's largest low-cost carrier has grounded all its flights and cut all salaries by 50%.
- Jet2's owner, Dart Group, has suspended all flights until 1 May at least and said it was in talks with lenders. It declined to comment on Monday on whether it would seek state aid, having this month said it would consider doing so.
- Flybe, previously the EU's largest regional carrier, collapsed as the coronavirus crisis started to hit flight demand. The bankruptcy cost 2,000 jobs and has rippled through the supply chain, with job cuts from companies such as Swissport at regional airports.
Comment: See also: