Menzies is laying off over half of its global workforce and is seeking funding from the government’s COVID Corporate Financing Facility as grounded flights worldwide put a strain of international air cargo supply chains.
The air services firm said that between 10 March and today (27 march) it had seen a 20% drop in air cargo volumes, despite an initial increase in activity in certain areas as freight customers sought to respond to underlying demand patterns.
Chief executive Giles Wilson said: “John Menzies has existed since 1833 and been listed since 1962 but never have we faced such difficult and unpredictable times. Our industry has been one of the most affected by COVID-19 and we are doing everything we can to reduce costs whilst looking after the needs of our employees.”
“I now look to our government to support our business and for them to provide the support required to help the UK aviation sector to navigate this crisis.
“For the aviation supply chain to function it requires a strong inter-reliant chain of airlines, airports and service providers. Without these three components of the supply chain, working together, the sector will not function. Handlers such as Menzies are therefore essential to the recovery and future success of the UK and global aviation industry.”
As part of our cost reduction initiatives to cope with the impact of COVID-19 on the business, Menzies said it had reduced global headcount by over 17,500 in response to the dramatic fall in volume. It said that reductions are being supported in some countries by governmental schemes and it hoped that “in the fullness of time” a high number of these employees can return to the business.
Menzies said all directors and senior management had now taken 20% fee and salary reductions.
The air cargo specialist said it was engaged with the UK government as it attempted to secure some of the emergency funding announced by the chancellor of the exchequer and await the refinement of the eligibility criteria for the COVID Corporate Financing Facility (CCFF) which it said it does not currently qualify for.