By Sam Morgan
(EurActiv) — Brussels Airlines announced a major restructuring of its business on Tuesday (12 May), including job cuts that could affect 1,000 employees, a reduction in fleet size and a smaller network of destinations.
Belgium’s main airline is in huge difficulty because of the coronavirus outbreak, which has pushed the carrier to ground its fleet and furlough many of its 4,000 workers. Today, the company revealed how it plans to ride out the slump in demand and recover afterwards.
In a statement, Brussels Airlines outlined “substantial and indispensable measures” that include a 25% smaller workforce – equal to 1,000 jobs – and a fleet smaller in size by 16 aircraft – down from 54 to 38.
“The restructuring is urgently needed in order to survive the current crisis and become structurally competitive in the future,” said CEO Dieter Vranckx, who added that his company’s intention is not just to survive but to build “long-term structural profitability and growth”.
Which destinations the airline serves will also be reviewed. The carrier is a favourite of EU officials and national representatives who have to visit the Belgian capital for work, but the network is set to shrink by 22 destinations.
After the airline first grounded its fleet in late March, rumours began to circulate that the firm could be nationalised by the government in order to save it. That significant step now looks unlikely, although the company acknowledges it is seeking public money and aid from its parent company, Lufthansa.
Germany’s main airline is locked in its own talks with Berlin over a reported €9 billion bailout but the issue of how much say the government should have into the day-to-day running of Lufthansa has delayed a final deal.
Lufthansa CEO Carsten Spohr was due in Brussels this week to meet with Belgian Prime Minister Sophie Wilmès and talk about an aid deal. Lufthansa’s management has insisted that it has no plans to sell Brussels Airlines, despite its loss-making status even before the crisis.
Any aid package would be subject to European Commission approval and although the EU executive has held off from setting environmental criteria for bailout approval, it has suggested that only airlines that are in trouble because of the pandemic will get the thumbs-up.
Thanks for reading Eurasia Review. For more of our reporting make sure to sign up for our free newsletter!