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More airline redundancies and other problems
Adrian Leopard 641

More airline redundancies and other problems

The truth on airline contraction is becoming clearer

The latest round of redundancies appears to be from Jet2. It would appear that 102 captains and first officers are to be made redundant, the leavers being those who joined the company most recently. Another report states that 380 cabin crew will be made redundant; it is not entirely clear whether this figure includes the pilots or not but the inference is that it does not.

 

Whichever way you look at it, this is a massive reduction and signals a significant contraction in the operations of Jet2. We are informed that in fact this proposed redundancy will more or less apply to the entire group of Thomas Cook staff who were taken on when that company collapsed. Clearly Jet2 is battening down the hatches as it is also proposing a temporary salary reduction although there are no details yet as to how this will be applied.

 

This comes just when Ryanair and other airlines are winding up their operations to make the best of the summer holidays. Further reductions in aircraft availability can only point to the possibility of price increases in due course as competition decreases.

 

However, all is not well on the western front. The European Union is now considering a ban on US travellers coming to Europe. They would be added to a list of some 51 other countries already banned due to coronavirus. Certainly the USA has been sending out a number of very mixed messages just recently as to where it stands over Covid-19 with President Trump telling us it is all but over while the experts tell a different story, including outbreaks arising all over the country.

 

The US has now declared almost 2.5 million cases and over 123000 deaths, the largest in the world. Brazil is in second place with 1.51 million cases and 53000 deaths. The EU list is expected to be finalised this week but reviewed on a regular basis. It is likely that sparks will fly if the US is banned and the argument will be that it is just retaliation for the reciprocal ban in March.

 

France is also bringing in an interesting new rule banning any domestic flight where there is a train journey to the same destination of 2.5 hours or less. This ban will apply to low cost operators as well. Air France has already agreed to reduce its French domestic routes by 40% by 2021. All this is for environmental reasons.

 

This is an interesting development and France does of course have a train service which can deliver high speed transit. Perhaps this is a sign of the future? There is no doubt that a reduction in air traffic could be a major contributor to the needed reduction on CO2 emissions.

 

As we know Lufthansa is in the wars at the moment; we await the shareholder meeting on 25th June to see whether the relationship with the government will proceed and the $10 billion become available. In the meanwhile a couple of its subsidiaries are set to close. SunExpress, a joint venture between Lufthansa and Turkish Airlines, is permanently grounding aircraft and closing its German wing with the loss of 1200 jobs whilst Brussels Airlines could be sold off or face insolvency proceedings.

 

With everything closing down as it did back in March, it has all been a matter of speculation as to how things would look once the lockdown was lifted and aviation is one particular area where the stakes are extremely high. Now that life is coming back into the system it will very soon become clear who is operating and who is not and with the future of Covid-19 still very uncertain in terms of second waves, both in the UK and overseas, this remains a very difficult situation to call.

 

Adrian Leopard 24-06-20

 

Photo Kevin Hackert

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