Unions and the French government have urged the Toulouse-based planemaker to avoid compulsory staff layoffs as it eliminates up to 15,000 posts
The Airbus Company is planning to compulsorily layoff staff as the air travel failed to revive quickly due to the impact of the Coronavirus pandemic. The airline crisis has deepened and travel restrictions have made the situation more difficult for aviation stakeholders. Airbus has come up with the decision to cut off jobs however, the French government and the Unions have urged to terminate the compulsory layoff decision.
The Airbus Chief Executive Officer Guillaume Faury presented a warning in a letter to 130, 000 staff saying “I owe it to you to be transparent: it’s unlikely that voluntary departures will be enough.” The company previously informed the compulsory layoff could not be ruled out.
The French government and Unions have urged the European giant aircraft manufacturer to cancel the decision of compulsory layoffs. Almost 15,000 job posts will be affected if the layoff decision comes into action.
The Airbus Company based on Toulouse, France has repeatedly warned about staff layoffs and its uncertainty as the global aviation market has experienced the worst crisis impacting aircraft deliveries, airline finances, and air travel.
Airlines and aircraft manufacturers were hoping for a rise in air travel but it resulted in disappointment pulling over the restructuring plans. CEO Faury said the recovery in airline traffic over the summer period has not been at the level the industry was counting on. He further added the airline industry must prepare for a crisis that will probably be even deeper and longer than the previous scenarios suggested.
Airbus reported satisfactory aircraft deliveries for August however, the majority of aircraft are on their way to storage. The company’s official informed the constant interaction between management and employees is going on during this crucial time to ensure transparency and provide information on staff layoffs with the global workforce.
The rival company Boeing also announced its staff layoffs in April 2020 affecting over 16,000 jobs. Boeing has been hit hard by huge cancellation of aircraft orders with airlines struggling to sustain in the industry. The company’s CEO Dave Calhoun said the pandemic has been tough on the people, business, and industry. He added the global aviation market is now in a challenging position with only some signs of recovery. Besides, Boeing has been troubled by the grounding of B737 MAX aircraft and recently discovered a production defect in B787 Dreamliner.
The protest from unions supported by the government is creating a more troublesome situation for the aircraft manufacturers. Voluntary job cancellation and early retire instead of staff layoffs could be a good approach for the manufacturers and airlines however, it may assist only a little for the restructuring. The normal air travel will take considerable time so, airlines are incurring hefty losses with their aircraft stored in airports that need regular expensive maintenance.
International Air Transport Association (IATA) declared the air traffic failed to come back quickly as expected during July. As per the statistics published by IATA, there is a 52 percent decrease in flights as compared to the previous year (2019). 3.14 million flights were operated during 2019 by the month of August whereas only 1.52 million flights have been operated during the same period in 2020. This decline in air traffic has resulted in over $84.3 billion loss till now and the amount is expected to reach $419 billion.
The main reason for the decline in air travel is the inconsistency in border rules, says IATA adding that airlines are having difficulty in planning flights due to varying rules. Some countries have already lifted the restriction on international flights while some have allowed limited flights with strict precautionary actions and remaining others have fully banned due to the risk of COVID-19 outbreak.