British Airways to cut up to 12,000 jobs due to airline collapse

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BA planes on the ground

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Airlines from around the world immobilize planes as passenger numbers plummet


British Airways is expected to cut up to 12,000 jobs from its 42,000 employees due to a business collapse due to the coronavirus pandemic.

The airline’s parent company, IAG, has said it will impose a “restructuring and layoff program” until demand for air travel returns to 2019 levels.

The Balpa pilots’ union said it was “devastated” by the news and promised to fight “every” job loss.

IAG also owns the Spanish airline Iberia and the Irish company Aer Lingus.

In a statement, IAG said: “The proposals remain open to consultation, but are likely to affect most British Airways employees and could result in the dismissal of 12,000 of them. “

The company said it would take several years for air travel to return to pre-virus levels, a warning that has been repeated by airlines worldwide.

Along with IAG’s statement, BA CEO Alex Cruz wrote in a letter to staff: “Over the past few weeks, the outlook for the aviation industry has deteriorated further and we must act now. We are a solid, well-managed company that has faced and overcome many crises in our 100-year history.

“We also have to overcome this crisis ourselves. There is no government bailout for BA and we cannot expect the taxpayer to compensate wages indefinitely … We will see some airlines shut down. “

About 4,500 pilots and 16,000 cabin crew members work for BA, which has already put almost 23,000 employees on leave.

Balpa secretary general Brian Strutton said, “It came as a thunderbolt from an airline that said it was rich enough to weather the Covid storm and refused any government support.

“Balpa does not accept that arguments have been put forward to justify these job losses and we will fight to save each one. “

Global impact

Also on Tuesday, IAG revealed the impact of the virus epidemic on the group’s revenues. In the first three months of 2020, sales fell 13% to 4.6 billion euros (£ 4 billion). The worst is yet to come, warned Stephen Gunning, chief financial officer of IAG.

Airlines around the world have warned that they must fight for their survival.

In the UK, EasyJet has laid off 4,000 UK-based crew members for two months. And Sir Richard Branson called on the government to help bail out his airline Virgin Atlantic with an estimated loan of £ 500 million.

Elsewhere, Qantas put 20,000 employees on leave, while Air Canada did the same for approximately 15,200 employees. Norwegian Air has said it may run out of cash by mid-May. At American Airlines, approximately 4,800 pilots have agreed to take short-term leave with reduced pay, and more than 700 are taking early retirement.

We know that the aviation industry is in the grip of an unprecedented crisis. But IAG’s announcement is still cooling – and not just because of the number of jobs at stake. The company explicitly states that it expects recovery in the industry to be very slow, the passenger demand not reaching 2019 levels for “several years”.

The airline can currently survive on its financial reserves – and take advantage of the government’s retention program to lay off employees for a short period. Government support of this type is very short term. With a quick recovery, it might be enough to save a large number of jobs.

However, the prospect of this happening is deeply uncertain. It is not clear when countries will remove travel restrictions, under what conditions people will be able to fly – or even if they wish.

IAG has now made it clear that it expects the industry to be very different in the future from what was the norm until just a few weeks ago, and is taking action accordingly. But unions will disagree, and the company could find itself accused of overreacting – or even of taking advantage of the crisis to reduce its cost base.

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