Finnair today revealed that it is beginning negotiations on plans to reduce its employee count by 1,000. The Finnish flag carrier made the announcement as airlines across Europe look to rightsize their operations due to the impact of the COVID-19 pandemic.
While United States airlines haven’t been able to furlough employees due to the rules of the payroll support part of the CARES act, such provisions don’t apply to European airlines. Lufthansa previously said that up to 26,000 jobs could be at stake, while the figure stood at up to 12,000 employees for British Airways. Now, Finnair could also be decreasing its employee figure.
1,000 jobs could be cut
Today Finnair revealed that up to 1,000 jobs could be cut from its employee pool. Finnair currently employs around 6,700 workers worldwide, with 6,200 of these based in Finland. However, it is starting co-operation negotiations as it looks to rightsize its operations.
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Alongside the 1,000 permanent job cuts eyed by the airline, Finnair is also looking to implement additional temporary layoffs. Temporary layoffs have been a big part of Finnair’s adaptation to COVID since March. Indeed, the airline points out that almost all of its Finnish employees have been laid off for part of the spring and summer.
Commenting, Topi Manner, CEO of Finnair said,
“In addition to the continued furloughs, we have today announced plans which could result in a reduction of an estimated 1,000 jobs. These extremely unpleasant measures are necessary to ensure that Finnair will weather this unprecedented change of operational environment…”
Increased cost savings planned
The 1,000 planned job cuts are part of Finnair’s plans to cut its cost base permanently. In May, the airline revealed that it was planning to reduce this by €80 million ($94.6 million). However, today Finnair raised this by €20 million to €100 million ($118.3 million).
Reducing its number of staff will, in part, help to reach this goal. Finnair earlier revealed that it had sold an Airbus A350 on a leaseback agreement to free up cash. Instead of owning the aircraft, the airline will now pay to lease it from another company.
Other avenues that the airline is exploring to find savings include analyzing real estate, IT, sales and distribution, administration costs, and the structure of compensation.
The Finnish flag carrier is currently targeting a full traffic resumption to 2019 levels in the next 2-3 years. However, the airline believes that the trajectory of the recovery will steepen in latter years. As such, demand is expected to remain reasonably low for the foreseeable future.
Earlier in August, Simple Flying reported that Finnair would be cutting intra-European frequencies as the demand was not quite up to what the airline had been expecting.
What do you make of Finnair’s latest announcements? Let us know what you think in the comments!