Air Transport - The Potential for Airline Job Losses
The almost complete cessation of air travel during the Covid-19 pandemic could result in a jobs crisis throughout British aviation on the scale of the coal mining industry’s collapse during the 1980s, a report has warned.
The government is being warned of a surge in redundancies as airlines confront a future with fewer journeys made by air even after the outbreak recedes. The New Economics Foundation (NEF) said at least 70,000 jobs not only directly in the aviation industry but also those in the supply chain – including engineering, catering and duty free shopping – were at risk before the end of this year. Thousands of workers in the industry will have to retrain in other areas of the economy, it said.
Compiled in collaboration with the TUC, aviation unions and the climate action charity Possible, the study warned this figure would match the job losses in the coal industry in 1980-81 in the early years of Margaret Thatcher’s newly elected Conservative government, which left lasting scars for communities across the north, Midlands, Wales and Scotland.
The warning on aviation jobs comes at a crucial time for firms that have furloughed workers in the UK. Covering the wage bill of almost 9 million workers, the transition away from the furlough scheme is expected to trigger a wave of redundancies in the coming weeks, as the government gradually reduces the support available from August until the scheme closes at the end of October.
The warning on aviation jobs comes at a crucial time for firms that have furloughed workers in the UK. Covering the wage bill of almost 9 million workers, the transition away from the furlough scheme is expected to trigger a wave of redundancies in the coming weeks, as the government gradually reduces the support available from August until the scheme closes at the end of October. Redundancy consultations require between 30 and 45 days, depending on the number of staff affected, meaning companies deciding to cut jobs will have to start the process in the coming days. Firms will have to decide whether they can afford to keep staff on furlough when they have to start contributing towards the cost of the government scheme or choose to make workers redundant.
Virgin Atlantic continue to stare into the abyss
Airlines have been among the biggest beneficiaries of government support, with British Airways, Ryanair and easyJet placing more than 25,000 staff on furlough between them and borrowing £1.5bn using government-backed loans from the Bank of England. However, with new quarantine restrictions imposed, reduced passenger demand due to the health risks from Covid-19, and with fewer planned journeys expected in the near and medium-term future, airlines are still likely to make thousands of job cuts this year. Faced with the prospect of mounting job losses at aviation industry hubs across Britain, the NEF urged ministers to transform the furlough wage subsidy scheme into a retraining programme to help people move into other sectors.
Of the 70,000 jobs immediately at risk over the next three months, the NEF said 39,000 were directly in aviation jobs. The remainder are likely to be lost in the wider supply chain surrounding the sector in engineering, food catering, and duty free shopping, along with other industries. The NEF said at least 17,000 workers in the sector would need to permanently move into other areas of the economy, warning that aviation sector employment is unlikely to ever return to pre-crisis levels due to service cutbacks, automation and technological developments.
“We cannot consign these workers to the despair of unemployment,” said Frances O’Grady, general secretary of the TUC. “Aviation needs immediate support – and not just to protect the incomes of billionaire airline owners. Government must act now to protect workers’ jobs and livelihoods, to support the longer-term viability of the sector and to facilitate a just transition to lower-carbon operations.”
(First published in The Guardian)
KJM Today Opinion
The United Kingdom had, up until the outbreak of Coviod-19, one of the world’s leading aviation sectors. The potential problems now being faced are however, also being faced around the globe but Prime Minister Boris Johnson’s government have exacerbated the problem with the ill-conceived quarantine period now in place. A similar situation also can be found across the globe in all other industries.
While the stance taken in the NEF’s study regarding retraining is an admirable one, its flaw is that no area of working life has not been adversely affected by the pandemic (and the panic) that has swept the world. Consequently, however one chooses to try and deal with the fallout of mass lockdowns, there will soon be a large number of people out of work and no jobs for them to retrain for.
Speculation is mounting that American Airlines could struggle to stay alive
It is generally accepted that, at some point in the future, life will be rebuilt. The two questions surrounding this however, are firstly how long will it take, and secondly, how many of the freedoms enjoyed previously will be returned? That of course, includes the freedom to travel. Many countries are now in the process of easing lockdowns and re-opening their borders – but many, including the USA, are not. The United States does have a very substantial domestic travel industry but this alone will not sustain the country’s air transport sector. International travel is still vital and it is even more so in a United Kingdom that is no longer a member of the European Union. The UK’s departure from the EU alone does not sound the down-sizing of travel, by air or otherwise. It does however, emphasise the importance of it.
Airlines are like any other business; they must make money or fail. And the permanent failure of airlines leads to less use of aircraft, hence the reduction in engine development (crucial for improving the environment), less aircraft being built to start with (and let’s remember the UK is still a vital manufacturing partner in Airbus), and less of everything else, including airports. Talk of airlines going bankrupt almost never includes the job losses that result in reduced use at airports and all those employed – both directly and indirectly – by them.
The only way to save those thousands of jobs in the UK and millions worldwide is to get airlines flying again and passengers and cargo into their aircraft.
All images © Kevan James
'So You Want To Start An Airline' by Andy Martin
All the questions and answers about how airlines work
Available now: Aviation books from KJM Today - details on the Home Page