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Rolls-Royce is proposing to temporarily close its jet-engine factories for two weeks this summer as it manages costs due to the impact of the Covid-19 pandemic.
The aero-engine maker has begun talks with unions on the shutdown and cost cutting at its civil aerospace unit.
“As we continue to manage our cost base in response to the ongoing impact of the Covid-19 pandemic on the whole commercial aviation sector, we are proposing a two-week operational shutdown of civil aerospace over the summer,” it said in an emailed statement.
Rolls-Royce’s finances have been hit by the Covid crisis as its airline customers have grounded planes. It warned last month that travel would be even more constrained than expected this year, leading to increased cash outflow.
Rolls is expected to save tens of millions of pounds in wages, plus energy and other running costs.
Staff have been told the two weeks’ pay they will lose will be spread across the year to minimise the impact on their income, according to the Sunday Telegraph which first reported the two-week summer shutdown. The move is expected to affect all 19,000 staff in Rolls’ international civil aerospace division, including 12,500 in the UK, who make jet engines for airliners.
The emergence of more contagious variants of the Covid-19 virus have hit the travel industry’s hopes of a strong rebound in sales in 2021.
Last month, Rolls-Royce flagged that these “more contagious variants of the virus were creating additional uncertainty”, as it cut its forecast for engine flying hours this year to about 55%, compared with pre-Covid levels in 2019.
“Enhanced restrictions are delaying the recovery of long-haul travel over the coming months compared to our prior expectations, placing further financial pressure on our customers and the wider aviation industry, all of which are impacting our own cashflows in 2021,” the company warned on 26 January.
The UK government is aiming to have offered all UK adults aged 50 and older a first coronavirus vaccination by early May. But senior MPs warned last week that summer holidays abroad may not be possible unless other countries make better progress on vaccination.
Yvette Cooper, chair of the home affairs select committee, said it was vital that Britain’s immunisation programme was protected. “The vaccine programme is immensely important and we need to make sure it’s protected against any threat from new variants, and there may be others as we go forward,” she said.
UK tour operators had reported that many customers are setting their sights on an October trip overseas, rather than summer holiday deals, suggesting that many Britons are planning to holiday within the UK this summer.
Thomas Cook said 40% of its recent holiday bookings are for October onwards – compared with about 10% at the start of January, while Brittany Ferries reported that new bookings for summer 2021 are already 50% down on pre-Covid years, with some customers who have booked in advance starting to cancel.
Reuters contributed to this report.
Source: The Guardian
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