As the travel and leisure market carries on being battered by the coronavirus, British Airways parent company, IAG, said it had to place a “restructuring and redundancy program,” until national lockdowns were lifted.
This comes as BA already announced that 4,500 pilots and 16,000 cabin crew have already been furlough.
IAG who also owns Ireland’s Aer Lingus and Spanish airlines Iberia and Viuling said in a statement, “the proposals remain subject to consultation, but it is likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000 of them.”
This comes as global airlines echo a downturn in global travel and that it will take several years for airline travel to return to 2019 demand pre-virus.
Alex Cruz, BA’s chief executive wrote in a letter to staff outlining that the aviation industry had worsened in the last few weeks. He went on to explain that the outlook for the future of the industry did not look positive, explaining that the company had to take action now to protect the business. He wrote, “we are a strong, well-managed business that has fact into, and overcome many crises in our hundred-year history.”
He further stated in the letter that the company had to deal with the crisis on its own. “There is no government bailout standing for BA and we cannot expect the taxpayer to offset salaries indefinitely.” He added that he expects several other airlines to run out of cash and go out of business.
In a statement the pilots’ union Balpa described the news as “devastating” and it will fight “every single job cut.”
Brian Strutton who is Balpa’s general secretary followed saying, “this has come as a bolt out the blue from an airline that said it was wealthy enough to weather the Covid (-19) storm and declined any government support.”
He added that the union does not agree or accept a case for these intended redundancies.
Another union boss described BA’s decision as a “stab in the back”, Len McCluskey of Unite, went on to add that it was a “heartless decision in a time of national crisis”.
IAG warned in their statement on Tuesday evening that the coronavirus had affected the group’s revenues. IAG’s CFO, Stephen Gunning said that the first three months of 2020 the company’s income dropped 13% to £4bn.
The UK’s largest based airline, EasyJet has already put 4,000 UK-based cabin crew on 2 months unpaid leave. Virgin Atlantic airline who Sir Richard Branson is a shareholder, is seeking financial help from the UK government, appealing for a loan thought to be up to £500 million.
Norwegian Air has asked for help as it could run out of cash by May. Elsewhere, Air Canada has put 15,200 of its staff on leave, while Qantas has done the same for about 20,000 employees.
Germany’s biggest airline carrier, Lufthansa is believed to be in talks over a €9bn loan from the German government.
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