‘Our income has fallen off a cliff’: how lockdown hits firms large and small

‘Our income has fallen off a cliff’: how lockdown hits firms large and small

Johan Lundgren, chief executive, easyJet
For Lundgren, memories of one particular meeting underline just how swiftly coronavirus turned from a distant Chinese problem into an insurmountable block on aviation.

It was 3 March and Lundgren was in Brussels for a summit of A4E – an airline association that includes carriers such as easyJet, Ryanair, BA, Lufthansa, and Air France-KLM. The main subjects for discussion were airspace management and green targets. With coronavirus restrictions at that point limited to northern Italy, Ryanair said plummeting demand would be a short-term blip.

Lundgren says: “I remember some companies were saying it wouldn’t have a big impact. And I said, ‘We don’t know anything about this. It’s very uncertain – you can never tell.’ I wish I had been wrong.”

Four weeks later, easyJet’s entire 337-strong fleet was grounded.

“First and foremost it was a public health issue, so the focus was on the wellbeing of our people and customers. It’s one of those things: when the virus first hits you and you get the first reported case, it becomes very, very real.”

At this point, easyJet had only one reported coronavirus case among operating crew, and the airline does not know if they contracted the disease on board.

The majority of easyJet employees around Europe have been put on furlough – just over half of them in the UK scheme. “We had around 14,000 staff, and now there are about 650 people working, almost all from home.”

He holds daily remote conferences with his team and tries to communicate with the whole company via Facebook’s Workplace platform. He says those employees who have not been furloughed staff have never worked harder: “People are flat out … It’s the biggest crisis aviation has ever gone through.”

For Lundgren, the main focus is financial – “getting access to liquidity, and to reduce the cash burn so we can survive and manage a prolonged scenario”. That has included renegotiating a £4.5bn contract with Airbus for new aircraft – a deal that has been the subject of broadsides from easyJet’s founder and biggest shareholder, Stelios Haji-Ioannou, who last week called for Lundgren to be sacked.

The easyJet chief says keeping in touch with staff is vital: “Clearly there are a lot of people out there sitting at home, without work, concerned, who want to get back flying. You want to be sure that as we go through this crisis, you don’t leave them out. But it’s hard. We’re not getting everything right.”

EasyJet has been criticised for not automatically offering refunds, and for being slow to cancel flights when restrictions meant passengers were unlikely to travel. Lundgren says the company has been doing its best: “You make sure you look after, as much as you can, your customers during this process – and that’s difficult. We’ve got customer call centres in countries affected by the lockdown, that have been operating with limited access when the demand has been very high.”

The airline is maintaining – rather than mothballing – its fleet, so the planes can be ready to fly again at 15 days’ notice, and Lundgren says the airline is in daily communication with EASA, the European safety regulator, about measures that could be needed for flights to restart – from disinfecting planes to blocking off middle seats.

“We need to do it in a way that’s safe, orderly and matches the demand that’s out there. But at the same time, no one knows what will happen.”
Gwyn Topham

 

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