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28 May 2020 | 07:01

EasyJet to cut 4,500 jobs for reduced demand

(Sharecast News) - EasyJet plans to cut about 4,500 jobs as the airline prepares to restart flying with a smaller fleet and reduced demand as a result of the Covid-19 crisis.

The job cuts will affect up to 30% of the company's workforce of 15,000 and are the latest in a wave of redundancies to hit the airline industry. EasyJet said the cuts were required for the changed reality for its business in the wake of the coronavirus pandemic.

After announcing last week that it would resume flights on 15 June, EasyJet said it expected to fly about 30% of capacity in its fiscal fourth quarter compared with 2019. Its fleet size at the end of the 2021 year will be about 302 aircraft - 51 planes lower than expected. EasyJet said demand for air travel was unlikely to reach 2019 levels until 2023.

Booking trends on resumed flights are encouraging, the company said. Demand for summer is increasing from a low base and winter bookings are well ahead of a year earlier, including customers rebooking cancelled flights.

Johan Lundgren, easyJet's chief executive, said: "We realise that these are very difficult times and we are having to consider very difficult decisions which will impact our people, but we want to protect as many jobs as we can for the long term. Although we will restart flying on 15 June, we expect demand to build slowly, only returning to 2019 levels in about three years' time.

"We anticipate reducing staff numbers by up to 30% across the business and we will continue to remove cost and non-critical expenditure at every level."

The FTSE 100 company said after various funding initiatives are completed it expected to have about £2bn of extra liquidity. It said conditions were still too uncertain to issue financial guidance for the rest of the 2020 financial year.
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