Menzies remove 17,500 staff from the supply chain

Menzies has cut 17,500 jobs globally as it’s business suffers from an unprecedented drop in demand. They are not the only company downsizing within airfreight. DNATA in London Heathrow have mothballed two handling sheds as flights disappear.

It’s not just Menzies but across the airfreight industry

Although this article is headed Menzies don’t think they are on their own. Swissport, DNATA and WFS have all warned the UK government that the industry is facing a total collapse.

In the UK the staff retention scheme which sees staff layed off on 80% of their wages will be a big help. It means that as the industry recovers staff should be able to come back into the workforce in a measured and sustained manner. Hopefully the handling agent business will retain many of their most experienced staff.

The above picture sums up perfectly the issue for handling agents. A huge lack of aircraft in the sky with minimal passenger numbers.

What about GSA’s

General Sales agents for the airlines have for the main part stayed tight-lipped. There will definitely be casualties though as airlines stick to the commissioned sales contracts. A percentage of nothing remains nothing and with wages being the largest cost factor they are businesses in trouble.

Both passenger and cargo sales agents exist in order that costs are split across several airlines and with little passenger activity and only bear essential cargo moving funds will dry up quickly. Government help has been requested but business are reacting by laying off staff.

80 / 20 Split

In the UK the government scheme to pay 80% of wages for staff who are being kept on is welcomed. Even with the upper limit of £2500 a month for the large majority in the industry it is a lifeline.

For Menzies though their business is spread across 34 countries. This global spread would normally protect them from local issues. Not this time, it is the global reach of their business with a narrow window of operation which is exacerbating the problem. They are also unsure that their business qualifies for COVID-19 relief. This would be a big blow to both them and their employees.