BA to make 12,000 workers redundant amid coronavirus crisis

  • Video report by ITV News Business Editor Joel Hills

British Airways is set to make up to 12,000 workers redundant, parent company IAG has announced.

The airline, which employs 42,000 people, has suffered from the global collapse in passenger numbers caused by the coronavirus pandemic.

IAG said BA will consult on a “restructuring and redundancy programme” as it is expected to take “several years” until demand for air travel returns to 2019 levels.

It added: “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.”

As BA finds itself in trouble, ITV News Business and Economic Editor Joel Hills explains what the company is doing

In a letter to staff, the company's CEO, Alex Cruz, said: "Our very limited flying schedule means that revenues are not coming into our business. We are taking every possible action to conserve cash, which will help us to weather the storm in the short-term.

"We are working closely with partners and suppliers to discuss repayment terms; we are re-negotiating contracts where possible; and we are considering all the options for our current and future aircraft fleet. All of these actions alone are not enough.  

"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. Any money we borrow now will only be short-term and will not address the longer-term challenges we will face."

Thousands of British Airways staff had been awaiting an update on their job security, with talks taking place between the airline and unions.

Discussions between the airline, which has grounded much of its fleet, and the Unite union were ongoing last week amid the coronavirus pandemic.

It was thought at the time cabin crew, ground staff, engineers and head office staff were likely to have their jobs suspended - but redundancies were not expected.

Around 4,500 pilots and 16,000 cabin crew work for BA.

IAG did not provide a breakdown of how many people in each role could be made redundant.

Brian Strutton, general secretary of pilots' union Balpa, said: "BA pilots and all staff are devastated by the announcement of up to 12,000 possible job losses in British Airways.

"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."

Jim McMahon MP, Labour's Shadow Transport Secretary, commenting on the news that British Airways is making 12,000 employees redundant, said:

“This is devastating news for those affected at British Airways. The Government should have stepped in sooner and done more to protect their jobs. The aviation industry is critical to the UK economy but workers should not be being laid off by those at the top who have reaped the rewards from their hard work.

“It was always clear aviation needed a sector-specific deal to alleviate the immediate financial pressures that exist, yet the Government failed to act.

“The Government must do more to ensure that airlines and airports have the financial resources needed to operate in a safe environment for staff and customers when the time is right to transition out of the lockdown.”

It announced the planned job cuts as it revealed that revenues plunged 13% to 4.6 billion euros (£4 billion) in the first three months of 2020 after the pandemic hit capacity.

The group also swung to a 535 million euro (£466.3 million) operating loss before exceptional items, from a 135 million euro (£117 million) profit for the same period last year.

It said profits were hit hard by a 1.3 billion (£1.1 billion) charge for the year after over-hedging on fuel and foreign currency.

Airlines around the world face a struggle to survive due to the pandemic.

Sir Richard Branson has warned that Virgin Atlantic will collapse unless it receives Government support.

It emerged on Monday that most of Norwegian's aircraft will remain grounded for a year.