Econostrum | Economic News in the Mediterranean

Covid-19 crisis leads Airbus to cut 15,000 jobs and Air France 7,585

Written by Frédéric Dubessy on Wednesday, July 1st 2020 à 12:02 | Read 110 times

Airbus wants to lay off 5,000 employees in France (photo: Airbus /S.Ramadier)
Airbus wants to lay off 5,000 employees in France (photo: Airbus /S.Ramadier)
FRANCE / SPAIN. Nothing is going well in the aeronautics sector with two announcements in 24 hours. Airbus is planning to cut 15,000 jobs and Air France 7,585 full-time equivalent (FTE) positions.

The European aircraft manufacturer (135,000 employees) based in Toulouse wants to "adapt its worldwide workforce and resize its commercial aircraft activity (editor's note: in fall of 40% these last months) in response to the Covid-19 crisis," as its management indicates in a press release. Its plan therefore foresees a reduction of about 15,000 positions by the summer of 2022 at the latest, including 5,100 in Germany (with its Premium Aerotec subsidiary) out of a workforce of 45,500, 5,000 in France (with its Stelia Aerospace subsidiary) out of a workforce of 49,000, 1,700 in the United Kingdom (currently 11,000 employees), 900 in Spain (12,500) and 1,300 at its other sites worldwide.
Airbus does not envisage a return to pre-Coronavirus air traffic levels before 2023 and potentially by 2025 at the latest.

Agreements with the social partners will have to be reached by autumn 2020. According to Guillaume Faury, CEO of Airbus, his group "is facing the most serious crisis this sector has ever experienced (...) The measures we have taken so far have enabled us to absorb the initial shock of this global pandemic. Now we need to make sure that we can sustain our company and emerge from the crisis as a healthy global aerospace leader".

At the beginning of June 2020, the French government released €15 billion to support the aerospace industry. At the announcement, the Ministry of the Economy stated that it expected Airbus to "make full use of the instruments put in place by the government to reduce the number of job cuts", while "limiting forced departures as much as possible".

More than 1000 job cuts at Hop!

Hop! the regional subsidiary of Air France, is going to be greatly affected by these redundancies (photo: B.L.).
Hop! the regional subsidiary of Air France, is going to be greatly affected by these redundancies (photo: B.L.).
It is through the voice of Jean-Baptiste Djebbari that the 7,585 redundancies between now and 2022 at Air France (41,000 permanent FTEs), announced the day before to the unions in an extraordinary works council, were confirmed. The French Secretary of State in charge of Transport asked the airline management to have as few forced departures as possible, to have recourse to voluntary departures as well.

The regional subsidiary of Air France, Hop! will be the most severely affected with more than 1,025 job cuts for a current workforce of 2,400 FTE positions. In particular, two of the company's maintenance sites as well as its flight base in Toulouse are expected to close.

Benjamin Smith, CEO of Air France, had indicated at the end of May 2020 that he wanted to reduce the French network by 40% by the end of 2021. This was one of the conditions of the financial support granted by the French State, at the end of April 2020, to the company with a global cheque for €7 billion (€4 billion in guaranteed bank loans and €3 billion in direct loans) to help it face the consequences of the pandemic on its turnover. Jean-Baptiste Djebbari warns that this sum "is not to pay for social plans".



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