By Yadarisa Shabong
(Reuters) - Airport services group John Menzies (L:MNZS) is laying off half its global workforce due the coronavirus-related slump in air travel, and will need special dispensation to get aid from a UK emergency fund for which it does not currently qualify, it said on Friday.
Among the biggest providers of fuelling, ground handling, lounge services and maintenance, Menzies said its volumes had dropped 20% in the past two weeks as airlines ground flights in response to faltering demand and government curbs on movement.
"John Menzies Plc has existed since 1833 and been listed since 1962, but never have we faced such difficult and unpredictable times," Chief Executive Giles Wilson said in a statement.
Menzies, which employs over 32,000 employees at more than 200 airports worldwide, said it has cut global headcount by over 17,500, and that the reductions are being supported by some countries' government schemes.
The company said it was waiting for the refinement of the eligibility criteria for the COVID Corporate Financing Facility (CCFF), for which it does not currently qualify.
While it will receive the 80% salary aid on offer from the British government, a company spokesman said that in terms of accessing emergency credit, the group was too big to be classified as a small to medium-sized enterprise (SME), but too small to have the credit rating necessary for the CCFF.
Britain's state aid programmes for the coronavirus shutdown carry conditions related to the company's contribution to the UK, rather than global, economy, and demand that firms were already on solid financial ground before March 1.
Wilson said Menzies plays an important role in the aviation supply chain, which includes airlines, airports and service providers.
"Without these three components of the supply chain working together, the sector will not function," he said.
Menzies said it was in talks with its lenders as it reviews all options to shore up liquidity and withstand the impact of the virus.
Edinburgh-based Menzies was a major British high street name until the late 1990s, when it reinvented itself as a major global provider of fuelling and cargo handling for airlines.
Operating in 34 countries for over 500 airline customers, the company was already struggling last year with weakness in Europe, lower cargo volumes and fallout from the global grounding of Boeing's (N:BA) 737 MAX jets.