ARCHIVED - Furlough schemes unlikely to continue after September for hotels, bars, restaurants and air travel in Spain

The loss of special ERTE status could lead to workers in certain sectors being laid off this autumn

The ERTE furlough schemes which were made available in Spain to help businesses and employees during the coronavirus crisis will come to an end on September 30, and although in many sectors of the economy the schemes have become unnecessary, as the “new normal” develops there are signs that in air travel, bars, restaurants and tourist accommodation this could lead to many people becoming unemployed.

These were among the “ultra-protected” sectors when the first wave of coronavirus infection swept across Spain in the spring of 2020, benefitting from government subsidies which enabled them to keep staff on although they were not working, but they no longer meet the requirements for that category now that flights have resumed and establishments in the hospitality sector are open again.

This has led to most of the businesses which initially filed for ERTE schemes now having taken on at least 65 per cent of their staff again, and as a result there has been a considerable reduction in the number of employees on furlough since the start of this year. A peak of 900,000 was reached on February 25, but the latest figures quoted in El Economista state a total of 286,829 on August 13.

In the hospitality sector, the increased activity and employment over the summer seems certain to lead to special status being lost, as is the case in accommodation, but it is possible that the criteria for extra protection could still be met within the air travel sector. In July, the figures showed that the number of people on furlough stood at 5,500 as opposed to 34,000 in employment, a proportion slightly over the minimum requirement of 15 per cent, although that could change during the month of August. Travel agencies seem almost certain to “make the cut”, reporting a proportion of 25.5 per cent in mid-August, but it is uncertain whether government subsidies will still be provided even in this sector.

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