John Menzies slashes 55% of its global workforce as Coronavirus curbs traveling

The Coronavirus pandemic is weighing the heaviest on the global travel industry. In its announcement on Friday, the British Airport services group, John Menzies (LON:MNZS) announced plans of slashing 55% of its global workforce amidst the falling demand.

The company also highlighted that it currently isn’t eligible for financial support from a UK emergency fund and will be seeking special dispensation.

Menzies is one of the largest providers of ground handling, fueling, maintenance, and lounge services. The company highlighted a massive 20% reduction in volumes in the recent 2 weeks as the rising government restrictions pushed the airlines into canceling flights as a reaction to stumbling demand.

Menzies Reduced Its Global Headcount By Over 17,500 Workers

CEO Giles Wilson commented on Friday:

“John Menzies Plc has existed since 1833 and been listed since 1962, but never have we faced such difficult and unpredictable times.”

Menzies currently has a total of 32,000 workers located at over 200 airports across the world. The company said on Friday that its global headcount is being slashed by more than 17,500. The company also accentuated that it wishes to wait for the eligibility criteria to be refined for COVID Corporate Financing Facility (CCFF). Currently, Menzies said, the company is not eligible for CCFF.

The British government’s 80% salary aid, however, will be available to Menzies. For CCFF, according to the company spokesman, Menzies is large enough to not fall in the SME (small to medium-sized enterprise) category but sufficiently small to be able to hit the credit rating that is required for it to meet the eligibility criteria.

UK’s financial aid schemes for businesses hit by the Coronavirus pandemic decide the eligibility based on the contribution that the company has made to the United Kingdom rather than the global economy at large. It also demands that the company presents substantial proof that its financial statue was firm before March 1^st.

Menzies Has Lost Around 85% In The Stock Market In 2020

Menzies role, Wilson added on Friday, is uncompromisable in maintaining the aviation supply chain that affects airports, airlines, and service providers alike. As per Wilson, “Without these three components of the supply chain working together, the sector will not function.”

Menzies is also exploring other options including negotiations with lenders to improve its liquidity and tackle the economic impact of COVID-19.

At 76 pence per share, Menzies is currently trading 10% down on Friday. The company has lost around 85% in the stock market in 2020 so far. Menzies operates for more than 500 airlines worldwide and is active in 34 countries.