Edinburgh aviation services giant John Menzies reduces workforce by 17,500 amid coronavirus crisis

John Menzies, the Edinburgh-headquartered aviation ­services group that operates in 34 countries, has laid bare the impact of the coronavirus pandemic on its business after reducing its global headcount by more than 17,000.

By Scott Reid Friday, 27th March 2020, 8:31 am Updated Friday, 27th March 2020, 1:05 pm

John Menzies is an Edinburgh-headquartered aviation ­services group that operates in 34 countries.

The group said that since it had published its results on 10 March, the impact of the spread of the Covid-19 virus had increased significantly and extended across all of its international operations.

Airlines have suspended thousands of routes and grounded aircraft while some airports have shut down entirely.

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Menzies, which has more than 30,000 employees, had already suspended its ­shareholder dividend amid the headwinds caused by the outbreak.

In a new update, the firm said it had seen its international and domestic airline customers ground passenger flights on an “unprecedented” scale.

This has resulted in “significant” reductions in activity for its core operations, with the number of flights handled in the past two weeks down by more than 60 per cent and ancillary services similarly adversely impacted. The dynamics in the cargo sector were described as “more mixed”.

As part of cost-control initiatives, the firm revealed that its global headcount had been reduced by some 17,500 people in response to the slide in volumes.

Reductions were being supported in some countries by governmental schemes, it noted, while bosses are hopeful that “in the fullness of time a high number of these employees can return to the business”. All directors and senior management have now taken 20 per cent fee and salary reductions.

Chief executive Giles Wilson said: “John Menzies plc 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.”

Earlier this month, Menzies released results for 2019 which revealed a pre-tax profit of £17.3 million, down from £21.6m a year earlier. Revenues came in at just over £1.3 billion, marginally up on 2018.