The companies which dominate ground handling services at UK airports have warned that they will begin axing 10,000 employees within hours unless ministers extend the government’s emergency wage subsidy scheme.
Sky News has learnt that the quartet – Dnata, Menzies Aviation, Swissport and Worldwide Flight Services – have written to Steve Barclay, chief secretary to the Treasury, to say they will instigate a formal programme this weekend to permanently lay off 40% of their combined workforce.
The letter, sent on Friday, underlines the sense of panic and uncertainty among large employers about the prospects for securing taxpayer funding for workers’ salaries beyond the provisional end of the Coronavirus Job Retention Scheme on May 31.
In their letter, a copy of which has been passed to Sky News, the four companies said: “If the Job Retention Scheme ends as planned at the end of May, we will be forced to make upwards of 10,000 staff redundant.
“This, as you know, is because businesses making over 100 people redundant are mandated to inform all affected personnel with at least 45 days’ notice.
“This means that by tomorrow, 18 April 2020, we will be forced to commence a wholesale widespread sector redundancy process that dovetails the exit of our people from our business the moment the JRS is scheduled to end; notionally 31 May 2020.”
The letter is the latest in a series of pleas from the quartet of companies to ministers in recent weeks, which have included a request for a 12-month business rates holiday for their sector.
Sources say the airport services groups have been disappointed with the level of government engagement with them, given the essential role they play in the aviation supply chain.
“Having witnessed a 95% revenue drop leading to the laying off of thousands of our 25,000-strong workforce, absent of any flexibility on these dates, our businesses edge closer to complete collapse,” they told Mr Barclay.
“What’s more, the more staff we lay off, the greater the challenge we will face in servicing any UK recovery and corresponding national economic uptick once the COVID-19 crisis is over.”© Getty
Sky News reported earlier this week that business groups were pressing for urgent clarification about the expiry of the job retention scheme.
Dame Carolyn Fairbairn, the CBI director-general, said she was “very concerned that businesses will be forced into a position potentially of having to make people permanently redundant”.
The Treasury has not ruled out an extension to the programme, saying the chancellor, Rishi Sunak, would review whether it needed to remain open for longer than the initial three-month period.
It was unclear on Friday, however, whether such an extension would be signalled ahead of the Saturday deadline flagged by the airport ground handling groups.
In their letter to Mr Barclay, the companies said their request had been made more urgent by the government’s decision to extend the UK lockdown for a further three weeks.
“Should we place all of our personnel on redundancy notice ahead of the weekend, notwithstanding the government extends the private and commercial lockdown period, there will be confusion as to why we are forcing redundancies when we are still not out of lockdown,” they wrote.
“Hence, it is imperative that the Treasury is decisive on this matter.
“To do so will avert the unsightly and unnecessary mass redundancy of tens of thousands of skilled personnel leading to the collapse of the UK aviation system – regardless of promises of help to airports and airlines.”
The warning from the four companies comes as talks continue between the government and a number of airlines, including Virgin Atlantic Airways, about financial support from taxpayers.
Mr Sunak has told the aviation industry that “bespoke” support would be considered “only as a last resort”.