International Airlines Share News (IAG)

(Sharecast News) - At least 70,000 jobs are at risk in the UK aviation industry and its supply chains in the next three months as the sector is battered by the coronavirus crisis, a report said.
Of the jobs immediately at risk, 39,000 are in aviation with the rest likely to be lost from suppliers to the sector, the New Economics Foundation (NEF) calculated. The thinktank said the potential job losses were on a par with those in the UK coal industry in the first two years of the 1980s.

At least 17,000 workers will need to leave the aviation industry permanently and employment in the sector will probably never return to pre-crisis levels as companies cut services and turn to automation to reduce costs, the report said. Based on past trends the total number of jobs lost in the industry and supply chains could be 124,000 NEF said.

NEF said its job-loss estimates for the aviation sector were based on recent announcements by airlines, which include almost 20,000 cuts by British Airways, easyJet and Ryanair, and effects of past efficiency drives. For supply chains its estimates were based on government employment multipliers for the transportation and storage industry.

Airline bosses have warned more jobs could go because of the government's 14-day quarantine scheme for new arrivals to the UK.

In 2014, seven years after the financial crisis, passenger numbers returned to their pre-crisis levels but job numbers remained 17% lower, NEF said. Since then, job numbers have only been sustained by rising passenger numbers. Stagnation for the next five years would lead to at least a 12% drop in long-term job numbers as companies continue to automate and reduce costs, NEF said.

Frances O'Grady, general secretary of the Trades Union Congress, said: "Aviation is a critical part of our economic infrastructure and it supports tens of thousands of good jobs. The sector has already been hit hard by the Covid-19 pandemic and the implementation of the quarantine period is a further blow.

"We cannot consign these workers to the despair of unemployment. 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."

The report, produced with trade unions, said airlines already benefited from £7bn a year in tax breaks and that BA owner IAG and easyJet had taken £900m of government support during the crisis. IAG has paid out more than £3.4bn to shareholders in the last five years and is pressing ahead with 12,000 job cuts despite political pressure to delay, NEF said.

Airlines grounded planes during the Covid-19 lockdown and are planning to restart flights at reduced capacity with demand expected to take years to recover.

The industry will probably need more capital in the next few months and the government should make sure any bailout plan limits redundancies and retrains workers with airlines paying their share of the cost, NEF said. The government should exchange financial support for for equity stakes and use its influence to suspend dividends, reduce bosses' pay, end tax avoidance and require green investment, the report said.