Dhaka: British Airways (BA) has announced that it is planning to cut 12,000 staff as air travel collapses over the coronavirus pandemic.
Alex Cruz, Chief Executive of BA said in a letter to the airline's 42,000 staff on April 28 that the company “must act decisively now to ensure that British Airways has a strong future” and that means more than one in four jobs must be cut.
Cruz said the UK’s flag carrier airline, which has placed 22,600 people on the government’s furlough scheme, “cannot expect the taxpayer to offset salaries indefinitely”.
“Yesterday, British Airways flew just a handful of aircraft out of Heathrow. On a normal day we would fly more than 300. What we are facing as an airline, like so many other businesses up and down the country, is that there is no ‘normal’ any longer,” Cruz added.
“We are a strong, well-managed business that has faced into, and overcome, many crises in our hundred-year history. We must overcome this crisis ourselves, too,” the letter said.
Cruz mentioned the airline and its parent company International Airlines Group, had informed the government and its trade unions about its plans to cut jobs, and would begin a consultation period with staff and unions immediately.
IAG said it had plunged to a loss of EUR 535m in the first three months of this year – with all the damage being done in March. In the same period last year the airline group made a profit of EUR 135m. IAG also revealed it had made a one-off loss of EUR 1.3 billion – the result of taking out contracts to hedge against the possibility of rising oil prices. In fact the oil price has crashed.
IAG further added that BA had been hit hardest, with other airlines in the group – Iberia, Aer Lingus and Vueling – feeling less impact.
Unions responded with anger. Brian Strutton, the general secretary of the pilots’ union Balpa, said staff were devastated by the “bolt out of the blue” news and that the union would fight for every job.
BA, he added, had “said it was wealthy enough to weather the COVID-19 storm and declined any government support.”
The leader of the Unite union described BA’s decision as heartless, and a “stab in the back”, saying it was “entirely at odds with the course of action followed by our European competitors as they seek a way through the coronavirus crisis”.
The airline industry is facing its biggest ever challenge with the vast majority of flights grounded around the world. It is unclear when governments will allow airlines to resume a regular schedule.
When planes do take to the skies again social distancing measures – which are likely to limit the density of passengers onboard – will make it hard for airlines to make the same profits as before.
The global airlines trade association IATA has predicted that airlines could lose more than USD 300 billion in the fallout from the pandemic and warned that 25 million jobs are at risk.