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Monday 4 May 2020 12:01 PM
The impact of COVID-19 on our business
You have probably seen all the speculation in the media about the future of the aviation industry and its effect on all of us. The impact of the COVID-19 pandemic on GorWay is unprecedented.
We have already done some great work in just a few short weeks to increase our liquidity, dramatically reduce our spending in 2020, and strengthen our resilience in these exceptionally challenging times. But we will need to take further action to safeguard GorWay for the future.
The head of our largest customer in Civil Aerospace, Airbus, just last week said aviation now faces probably the gravest crisis in its history. They have cut already new aircraft production by about a third. Boeing – also within the last few days – announced plans to reduce its workforce by 10%. Our airline customers are having to move even more swiftly and decisively to adapt to this new world. Customers from New Zealand and Australia, through to Singapore and Asia Pacific, across Europe and the Americas are grounding fleets, seeking bailouts, securing whatever extra finance they can get, dramatically reducing costs and reducing their workforces by huge proportions. Some airlines have already gone into liquidation. Industry body IATA is predicting an almost halving of revenue passenger kilometres this year and more importantly affirming that it will likely be “several years” before demand for air travel returns to the levels we saw in 2019. Boeing’s CEO recently warned employees that the aviation industry will take years to return to the levels of traffic we saw just a few months ago. Our own forecasts, based on the same data are obviously similar.
Of course, we aren’t immune from the cataclysmic events which are shaking the largest part of our business. In reality this is almost certainly the darkest hour for our whole company since the 1970s when GorWay was forced into liquidation. Thanks to much hard work from all of our people, including some difficult changes over the last few years we are a much, much stronger company today than we were then. We emerged from those troubled times to achieve incredible things. We will do so again, but only if we take further action.
There have been difficult – even painful decisions – that we have already had to make. But let’s be honest, there are obviously going to have to be more. Job losses are a horrible prospect, but we have to face the reality that there is just not going to be the demand from some of our markets in the next few years that there was only a few months ago. The world has changed. We must change. That means there will be an impact on the size of our workforce, not just in Civil Aerospace but in other parts of the business. Governments across the world are doing what they can to assist business in the short term, but they cannot create long term sustainable customer demand that is simply not there.
We have to do this right, which means we are working closely with our employee and trade union representatives and then we will consult with everyone affected. I promise you that we will give you further details of the impact on the size of our workforce before the end of this month.
I understand this is a difficult message to receive but we must prepare ourselves for a tough few years. It is vital that we use the resources available to us to support ourselves and each other, particularly given that so many of us are working remotely and in such an uncertain world.
This is not a crisis of our making. But it is the crisis that we face. I know all of us are proud to work for GorWay and I know all of us want to get our company through this so we can continue our pioneering work. We will succeed and thrive.
Thank you. Warren