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Aviation: the harsh reality of COVID-19

With COVID-19 infection and death rates beginning to gradually decline across the globe, it might be tempting to think that perhaps light is starting to emerge from the gloom at the end of the tunnel for the beleaguered travel industry. If only it was that simple.

Left: The airline industry is in the midst of a storm not of its own making (Kevan James)

On April 14, The International Air Transport Association (IATA) revealed the COVID-19 crisis is likely to result in global airline passenger revenues dropping by $314bn this year, a decline of 55% year-on-year. The drop was more than $60bn greater than the -$252bn figure the trade body had forecast only three weeks early, and if nothing else these figures reveal how deep a hole the industry is in and that it is still digging.

Today, just two weeks after IATA's grim numbers were revealed, the revelation that British Airways (BA) is seeking as many as 12,000 redundancies among its 42,000 strong workforce undoubtedly came as devastating news to its employees. The carrier has already put 22,600 staff on the government furlough program but the chief exec admitted it “cannot expect the taxpayer to offset salaries indefinitely.” IAG, the group that BA is part of alongside Aer Lingus (Ireland) and Iberia (Spain), lost €535m (£465m) in the first quarter of 2020 compared to a profit of €135m during the same period in 2019, with almost all of the losses incurred in March. The second quarter will be far worse for IAG financially as the full effect of the COVID-19 shutdown bites. So clearly Cruz feels the need to slim down BA. However airline staff, especially air crew and engineers, cannot be recruited overnight if business rebounds and it is obvious that BA does not expect that to happen - it is right-sizing for the future, and that entails a headcount almost 30% less than pre-virus.

Above - British Airways has parked much of its fleet and has proposed as many as 12,000 job losses (Heathrow Airport)

Added to the potential job losses at BA are 10,000 or so more at risk at Virgin Atlantic should it fail to find a funding injection of around £500m before the end of May, and the massive cuts at Norwegian Air which has a significant UK crew base. They come on top of the collapse of Thomas Cook late last year and Flybe earlier this year. Other carrier