‘Airlines have to restructure or go bust’

Further redundancies in aviation are inevitable given the scale of the coronavirus crisis and uncertainty about when it will end, industry leaders have warned MPs

Airlines UK chief executive Tim Alderslade told Parliament’s Transport Select Committee: “I want to get across to you the scale of this disaster.

“It has never been this hard. There are travel restrictions. Demand has completely stopped. We don’t know when this [lockdown] will be lifted. We don’t know about the recovery.

“We don’t know what the public heath stipulations will look like. Until we know that we can’t get flying again, and we need to take passengers with us.”

He told MPs: “British Airways, Virgin Atlantic, Ryanair have all made announcements about job losses. It will probably take two to three years to get back to normal.

“We are going to have a much smaller, much leaner aviation sector for the next few years. We will probably see lower frequencies and lower capacity for some time.

“Airlines have to restructure or go out of business.”

Virgin Atlantic announced more than 3,000 job losses on Tuesday and BA up to 12,000 last week.

Alderslade echoed previous industry calls for an extension of the government’s Coronavirus Job Retention Scheme, under which up to six million UK employees have been furloughed, saying: “We are going to need an extension of the furlough scheme beyond the end of June.”

He said: “We are at least looking for the job retention scheme to be retained until September or October.”

But Alderslade added: “The job retention scheme can’t last forever. We have to wean ourselves off it.”

He questioned “the idea that all these jobs will be sustainable when the scheme ends” and said: “Airlines have to take out costs wherever they can.”

Heathrow Airport chief executive John Holland-Kaye echoed the warning and urged the government to clarify its plans to lift restrictions on travel.

He told MPs: “We need the government to say it has a plan. More than anything this can stop companies taking unilateral action on redundancies.”

Holland-Kaye warned: “Decisions on tens of thousands of [aviation] jobs will be made in the next few weeks.”

Abta’s Mark Tanzer spoke to Travel Weekly’s Ian Taylor one day prior to appearing before the Transport Select Committee

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