Thousands of British Airways workers are expected to lose their jobs as its owners, IAG, announce layoffs Tuesday afternoon.
Airlines are struggling to operate as coronavirus lockdowns hover around the world. BA had already started to struggle after having laid off more than half of its 45,000 employees.
In a statement, IAG said: “In light of the impact of Covid-19 on current operations and the hope that restoring passenger demand to 2019 levels will take several years, British Airways officially informs its unions of a restructuring project and redundancy program.
British Airways owners to lay off up to 12,000 people as airline struggles to cope with declining demand due to coronavirus pandemic, comes as airline planes are immobilized across the country , including in Bournmeouth, above
These British Airway planes are parked in Gatwick after the airline chose to take off from Heathrow only during the Covid-19 crisis
Willie Walsh, CEO of IAG, at British Airways headquarters in Hammondsworth, was previously Managing Director of BA and Aer Lingus
“The proposals remain subject to consultation, but are likely to affect most British Airways employees and could result in the dismissal of 12,000 of them.
“As previously announced, British Airways took advantage of the UK job-retention program Covid-19 and laid off 22,626 employees in April. “
Passenger numbers are expected to be halved from 2019, with Flybe already under administration before full lockdowns are in place in Britain.
In a statement, BA chief executive Alex Cruz said the company only handles a “handful” of flights departing from Heathrow each day.
Alex Cruz, CEO of British Airways, told staff in a letter that the airline is taking “all possible steps to save money”
Response from the British Airline Pilots ‘Association:
BALPA Secretary General Brian Strutton said:
“BA pilots and all staff are devastated by the announcement of 12,000 possible job cuts at British Airways.
“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 in favor of these job losses and we will fight to save each one. “
“Our very limited flight schedule means that income does not come into our business. We are doing everything possible to save money, which will help us weather the storm in the short term, “he wrote.
Cruz added that the company was working with partners and supplies to renegotiate the contracts and “discuss the terms of reimbursement.”
“All of these actions alone are not enough,” he told workers.
His letter continues, “There is no government bailout for BA and we cannot expect the taxpayer to compensate wages indefinitely. The money we are borrowing now will only be short term and will not meet the long term challenges we will face.
“We don’t know when countries will reopen or when closures will be lifted, so we need to rethink and reshape our airline and create a new future for our employees, customers and the destinations we serve.”
“We have informed the government and the unions of our consultation proposals on a number of changes, including possible downsizing.”
Balpa pilots union secretary general Brian Strutton said the decision came as a “thunderbolt”, adding that the union did not accept that BA had arguments in favor of the proposed job cuts.
Will air travel be more expensive?
According to an analysis by the US-based Dollar Flight Club, we can expect prices for airline tickets to drop in the short term, before prices increase significantly by 2025.
Until 2021, the flight service saw an average price drop of 35%, with airlines desperately trying to attract customers again.
But over the next four years, prices would then rise more than a quarter above pre-crisis levels, with demand outstripping supply significantly reduced.
The data indicates more severe declines and subsequent price increases than those recorded during the September 11 or financial crash.
“Passengers in smaller or short-haul markets can expect significant reductions in scheduled air services as airlines downsize,” said the report.
“It will make these trips much more expensive and more difficult to transport. In these markets, we can expect significant growth in train and bus travel. “
The club found that over the next year, customers could get a round trip from Los Angeles to London for $ 329, or a round trip from New York to Amsterdam for $ 278.
The news that thousands of people will lose their jobs comes weeks after Spanish airline owners decided to pay shareholders £ 300 million at the start of the month.
The Madrid-based International Airlines group proposed a dividend of around 17p per share in February, when the ravages of the killer virus on society and the global economy were already apparent.
But financial director Stephen Gunning said the money would be used instead to get the company through the virus crisis.
A former director of BA’s finance team told MailOnline earlier in April, “Don’t blame the virus. This business has been mismanaged for years. IAG simply sucked the life out of it. ”
Other airlines have felt the pressure of international travel, but almost stopped operating during the global pandemic.
Flybe took office in March, while Sir Richard Brnason is said to be seeking an investor for Virgin Atlantic.
Reports indicate that he failed to secure a government bailout with his £ 80 million private island as collateral.
The billionaire’s pursuit of £ 500 million in taxpayer intervention has in fact been put on hold, and the airline is focused on getting new support from private investors, according to the Sunday Telegraph.
About fifty potential lenders would have learned about the company – with contenders presenting options for injecting debt, equity or convertible loans, which could potentially leave the face of the Sir Richard brand without residual stake.
“All options” would remain on the table after Virgin Atlantic-hired investment bank Houlihan Lokey surveyed more than 100 possible financial institutions.
Potential investors would include Singapore sovereign wealth fund Temasek and Wall Street investor Cerberus Capital Management.
Ryanair chief Michael O’Leary dismissed forecasts of a slow recovery, saying he expected a rapid rebound in traffic fueled by “massive price dumping” in a race to win back passengers.
Low-cost airlines have been criticized for their “shy response” to the crisis by offering coupons rather than refunds to customers on canceled flights, in a desperate attempt to save money.
Aviation consultant Andrew Charlton told The Guardian, “You will never see a 747 fly again, and the only A380s will have Emirates painted on the side. “
Mr. Charlton said: “Yes, passengers will travel with their vouchers in reserve … But people who are burned by this now will not book in advance in the future – it ruins confidence in the booking . “
The largest airlines have also announced measures to boost the confidence of customers fearing they may be infected with a cramped cabin, as Emirates tests a rapid blood test, the results of which are available in 10 minutes, on all passengers in a flight from Dubai to Tunisia this week.
Global traffic is now down 80% year on year, reversing recent forecasts that airline passenger numbers will double in 20 years.
The International Air Transport Association said passenger revenues would drop by around £ 250 billion or 55% in 2020 due to the pandemic.
At the end of March, IATA, which represents 290 carriers, predicted that half of the world’s airlines would run out of cash within two to three months.
How coronavirus has affected UK airlines in the past month
Flybe: Europe’s largest regional airline collapsed on March 5 after months on the brink, causing 2,400 job losses and leaving around 15,000 passengers stranded in the UK and Europe. The owners of Flybe, a consortium including Virgin Atlantic, the Stobart group and hedge fund company Cyrus Capital, accused the coronavirus of precipitating the collapse of the sick airline. Flybe operated up to 50 routes in the UK, accounting for 40% of all domestic flights, and was used by 9.5 million passengers per year.
British Airways: The International Airlines group, which also includes Iberia and Aer Lingus, said on March 16 that there would be a 75% reduction in passenger capacity for two months, the boss Willie Walsh admitting that there was no guarantee that many European airlines would survive. “.
easyJet: The airline with 9,000 employees based in the United Kingdom, including 4,000 cabin crew members, immobilized its entire fleet of 344 aircraft on March 30. required.
Loganair: The Scottish regional airline said on March 30 that it intends to ask the government for a rescue plan to deal with the impact of the pandemic. Loganair will go to government despite the fact that finance minister Rishi Sunak told him last week that airlines should exhaust all other funding options before asking for help.
Jet2: The economic holiday airline suspended all flights departing from Great Britain until April 30. A number of Jet2 flights turned around last month during a trip to Spain when a blockade was announced in the country.
Virgin Atlantic: The airline said on March 16 that it would have cut its lights by 80% by March 26, and that figure will drop to 85% by April. He also urged the government to provide carriers with up to £ 7.5 billion in emergency credit facilities.
Ryanair: More than 90% of the Irish airline’s planes are now immobilized, with the rest of the plane on repatriation and rescue flights.