Jet engine maker Rolls-Royce may shut its civil aerospace facilities for two weeks this summer as the company evaluates its operational costs during the ongoing global health crisis, Reuters said on Monday.
The coronavirus pandemic has dealt a heavy blow to the company's finances as its airline clients have grounded planes. In January, Rolls-Royce warned that travel would be severely affected than expected for 2021, leading to more cash outflow.
Rolls-Royce expects to save tens of millions of pounds in salaries and other running costs with its planned closure, the first in the company's history, that will affect 19,000 civil aviation employees, including 12,500 in Britain, a company representative said.
The car and aircraft engine builder is looking to ease the financial burden for affected personnel by spreading their financial losses in wages across the year to lessen the impact on their pay.
Employees have been notified about the proposed shutdown in November. Rolls-Royce said it is now in talks with unions regarding the shutdown and how it will affect the company and the workers.
"We have now started complex and constructive discussions with the union on how this can be achieved," Bloomberg said quoting a company email.
The emergence of more infectious strains of the COVID-19 disease has dampened the travel industry's optimism of a strong rebound in revenues this year.
Rolls-Royce indicated that these more contagious variants of the virus were "creating additional uncertainty," as the company reduced its outlook for engine flight hours this year to around 55%, compared with pre-pandemic levels in 2019.
Last month, Rolls-Royce projected free-cash outflows of around $2.7 billion for the current year, saying that new pandemic-linked restrictions on travel will cause a setback in recovery for its long-haul flights.
