The grounding of air travel during the coronavirus pandemic could prompt a jobs crisis in British aviation on the scale of the coal mining industry’s collapse during the 1980s, a report has warned.

Putting ministers on notice for a surge in redundancies as airlines confront a future with fewer journeys made by plane even after the outbreak recedes, the New Economics Foundation (NEF) said at least 70,000 jobs in the wider aviation industry – including engineering, catering and duty free shopping – were at risk before the end of summer. Thousands of workers in the industry will have to retrain in other areas of the economy, it said.

Compiled in collaboration with the TUC, aviation unions and the climate action charity Possible, the study warned this figure would match the job losses in the coal industry in 1980-81 in the early years of Margaret Thatcher’s newly elected Tory government, which left lasting scars for communities across the north, Midlands, Wales and Scotland.

The warning on aviation jobs comes at a crucial time for firms that have furloughed workers in the UK. Covering the wage bill of almost 9 million workers, the transition away from the furlough scheme is expected to trigger a wave of redundancies in the coming weeks, as the government gradually reduces the support available from August until the scheme closes at the end of October.

Redundancy consultations require between 30 and 45 days, depending on the number of staff affected, meaning companies deciding to cut jobs will have to start the process in the coming days.

Firms will have to decide whether they can afford to keep staff on furlough when they have to start contributing towards the cost of the government scheme or choose to make workers redundant.

Airlines have been among the biggest beneficiaries of government support, with British Airways, Ryanair and easyJet placing more than 25,000 staff on furlough between them and borrowing £1.5bn using cheap government-backed loans from the Bank of England. However, against a backdrop of new quarantine restrictions, reduced passenger demand due to the health risks from Covid-19, and with fewer planned journeys expected in future, the airlines still plan to make thousands of job cuts this year.

Faced with the prospect of mounting job losses at aviation industry hubs across Britain, the NEF urged ministers to transform the furlough wage subsidy scheme into a retraining programme to help people move into other sectors.

Calling on the industry to negotiate redundancy limits with trade unions, it also said any airline industry bailouts should come with tough conditions forcing the suspension of shareholder dividends, excessive executive pay and tax avoidance, while also demanding firms invest more in green technology and decarbonisation.

Of the 70,000 jobs immediately at risk over the next three months, the leftwing thinktank said 39,000 were directly in aviation jobs. The remainder are likely to be lost in the wider supply chain surrounding the sector in engineering, food catering, and duty free shopping.

The NEF said at least 17,000 workers in the sector would need to permanently move into other areas of the economy, warning that aviation sector employment is unlikely to ever return to pre-crisis levels due to service cutbacks, automation and technological developments.

“We cannot consign these workers to the despair of unemployment,” said Frances O’Grady, general secretary of the TUC.

“Aviation needs immediate support – and not just to protect the incomes of billionaire airline owners. Government must act now to protect workers’ jobs and livelihoods, to support the longer-term viability of the sector and to facilitate a just transition to lower-carbon operations.”