EasyJet stock surges 7% as it slashes up to 4,500 jobs over COVID-19, and warns demand won't fully return until 2023

• EasyJet shares surged as much as 7.5% on Thursday as the company announced 4,500 job cuts due to COVID-19.
• The budget airline plans to restart flying on 15 June but only expects demand to recover from the pandemic by 2023.
• EasyJet plans to fly only around 30% of planned capacity in Q4 2020 compared to Q4 2019.
• EasyJet CEO said: "We expect demand to build slowly, only returning to 2019 levels in about three years' time."

EasyJet's stock surged as much as 7.5% on Thursday after the airline announced it would cut 30% of its workforce, approximately 4,500 jobs, in the latest sign that coronavirus has ravaged the aviation industry.

EasyJet chief executive Johan Lundgren said in a statement: "Although we will restart flying on 15 June, we expect demand to build slowly, only returning to 2019 levels in about three years' time.

"Against this backdrop, we are planning to reduce the size of our fleet and to optimize the network and our bases.

"As a result, we anticipate reducing staff numbers by up to 30% across the business and we will continue to remove cost and non-critical expenditure at every level," he added.

EasyJet will be launching an employee consultation over the coming days.

The airline expects to fly around 30% of planned capacity it flew into Q4 2019 in Q4 2020.

Although the news of job cuts is bad news for EasyJet and staff, investors cheered the cost-cutting measure, designed to protect the budget airline's financial performance.

After climbing by as much as 7.5% in morning trade, by midday UK time (7.00 a.m. ET), the stock was up around 4.9% at £7.52 ($9.21) per share.

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It also said it is not possible to give further fiscal guidance for the remainder of 2020.

The company said it expects its year end 2021 fleet size to be around 302 aircraft, 51 aircraft lower than anticipated fleet size for the end of 2021 before the pandemic kicked off.

The International Airport Transport Association warned earlier this month that market demand for the industry will not return to pre-crisis levels until 2023.

EasyJet has become the latest UK airline to announce job cuts, which is another stark sign of how the pandemic has taken a beating on the airlines industry which has struggled due to a halt in air travel and coronavirus lockdowns.

Earlier this month, Virgin Atlantic said it would cut 3,150 jobs.

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British Airways' parent company International Airlines Group is proposing a new employment structure for the flag carrier that seeks to permanently reduce the number of its employees by up to 12,000.

The European low-cost airline Ryanair warned start of the month that it would operate less than 1% of its normal schedule in June and is planning to cut 3,000 jobs, adding that it expects a post-crisis recovery to take a minimum of 2 years.