Fabio Gamba, Director General of ACA & ASA has written to all EU-27 Ministries of Transport/Depts of Civil Aviation and Finance urging financial support for its members to mitigate the effects COVID-19, which he called the “biggest and most challenging crisis ever faced by our industry.”
ASA and ACA represent ground handlers and airline caterers, with a workforce of around 400,000 and 150,000 employees respectively throughout the world. Some 180,000 workers are based in the EU.
Gamba stressed that, “Members won’t be able to continue their operations throughout the crisis and will very soon have to resort to extreme measures, such as mass lay-offs and unpaid leaves.”
He emphasised that, “this period of disruption is leading to a cash-flow crisis which poses a direct threat to our very survival. Our industry operates a low-margin model. We are generally paid on a per-service basis or tonnage, so where flights are grounded, our provision is cancelled, and our revenue cut off. Our main overheads are our labour force (70% of expenditure). We have already been forced to pursue aggressive headcount reduction in recent weeks and days, which we deeply regret.
“Looking forward, the more staff we lay off, the greater the challenge we will face in servicing the bounce-back and economic recovery once this crisis is over. On average we estimate it takes around three months to hire, train and badge new staff, and there is very low transferability between stations. There is therefore a strong business interest in maintaining the existing workforce. Any relief measures Governments propose to the industry are welcome. But these measures shouldn’t solely consider the airlines in isolation.”
Highlighting the interconnected nature of the industry, Gamba wrote, “It cannot be taken for granted that any support provided to airlines will necessarily trickle down to the rest of the value chain, including ourselves. In concrete terms, the support we are desperately looking for is ensuring cashflow to allow us to maintain as much of our existing workforce as possible during this period.
He asked for Ministers to:
- Take over the social costs incumbent to employers at least until September 2020;
- Defer tax payments until 2021;
- Provide access to an emergency fund which we can use to continue to pay salaries;
- Provide a guarantee to banks and financial institutions so that they maintain financing of the aviation sector, and ours in particular.