BTN Europe presents an overview of business travel and MICE predictions for this year
Update 30 April: Unite union general secretary Len McCluskey
has now pleaded with British Airways to stop its “unlawful and immoral”
redundancy plan. He said: “It is unlawful because they are denying these
workers the meaningful consultation that the law and common decency says that
they are owed. It is immoral because BA has been taking taxpayers’ money in
recent weeks – money supplied on the proviso that the company put the workers
on furlough while the industry reshaped. Instead, BA has taken a unilateral and
selfish action that could imperil an already very fragile aviation industry –
and so a great many jobs – in this country.
“We say to BA that there is a better way forward for both it
and the industry. We urge it to think again. I therefore call on BA to honour
the law, remove this threat of redundancy today and join with us to work with
the government and aviation industry to deliver the rescue package so
desperately needed by the whole sector.”
British Airways has started consultations with trade unions
about a proposed restructuring and redundancy programme affecting up to 12,000
staff members, according to owner International Airlines Group (IAG).
In its preliminary first quarter results, IAG said it
believes it will take “several years” to recover the level of passenger demand
seen in 2019, “necessitating group-wide restructuring measures”.
Across the group, which includes the airlines BA, Iberia,
Aer Lingus, Level and Vueling along with cargo operations, revenue declined 13
per cent to €4.6 billion in Q1, resulting in an operating loss of €535 million
compared to a profit of €135 million last year. Furthermore, it said its
pre-tax profit took a €1.3 billion hit resulting from fuel and foreign currency
over-hedging for the rest of 2020.
IAG said its operating result in January and February was
comparable to last year despite the early cancellation of flights to China, where the
Covid-19 pandemic began, meaning the major blow to profits came in March, when the
group’s airlines cut around 75 per cent of their global capacity.
With further capacity reductions announced in early April,
IAG said it expects to take an even bigger loss in the second quarter despite being
able to take advantage of the UK government’s coronavirus job retention scheme
to furlough nearly 23,000 employees.
IAG has so far resisted turning to government bailouts, with
CEO Willie Walsh famously coming out against state aid for airlines when the government was considering a package to save Flybe before its collapse.
The group said its liquidity
amounted to €9.5 billion at the end of March.
Writing to employees, BA chief executive Alex Cruz said: “In
the last few weeks, the outlook for the aviation industry has worsened further
and we must take action now. 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. There is no
government bailout standing by for BA and we cannot expect the taxpayer to
offset salaries indefinitely… We will see some airlines go out of business.”
Commenting on the redundancy announcement, Brian Strutton,
general secretary of the British Airline Pilots Association (BALPA) said: “This
has come as a bolt out of the blue from an airline that said it was wealthy
enough to weather the Covid storm and declined any government support. BALPA
does not accept that a case has been made for these job losses and we will be
fighting to save every single one.”
Unite union general secretary Len McCluskey, who earlier this
week said airlines should be forced to keep job cuts to a minimum in exchange
for state aid, said: “We say to BA’s Alex Cruz that this is a heartless decision
in a time of national crisis. With the majority of BA’s workers on furlough, we
would have expected him to work with both us and the government to honour the
spirit of the government’s job retention scheme.
“Governments across Europe… are working with trade unions
and airlines to rebuild back better, keeping people in work while the sector
recovers. We simply cannot understand as to why Alex Cruz is not doing the
same, unless he has sought an opportunity to see other airlines fail so that BA
can profit. To reject government support by then expect their own staff to pay
the cost of such a misjudgement is irresponsible, dangerous and destructive and
is utterly at odds with the mood of the country at a time of crisis.”