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British Airways Announces Potential 30 Percent Workforce Cut
British Airways has announced that it might cut up to 12,000 jobs from its 45,000 employee workforce, as the global coronavirus pandemic is having unprecedented consequences for airlines as the skies are emptied out for a prolonged period of time. The airline had previously agreed to furlough 22,000 jobs, taking advantage of the U.K. government’s temporary job retention scheme which covers 80 percent of employees’ salaries for wages of up to £2,500 ($3,110 USD) a month. As the future outlook looks bleaker, the U.K. flag carrier seems to be bracing itself with much more drastic measures.
In a letter sent out to British Airways employees, CEO Alex Cruz detailed the current state of affairs saying: “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.”
As many countries in the world expect to keep borders shut for the next few months and keep citizens grounded for a while, air travel is expecting to see perhaps an even slower recovery than what was initially estimated.
In this sense, Cruz commented to employees: “We have to reimagine and reshape our airline and create a new future for our people, our customers and the destinations we serve. We have informed the Government and the Trade Unions of our proposals to consult over a number of changes, including possible reductions in headcount. We will begin a period of consultation, during which we will work with the Trade Unions to protect as many jobs as possible”
The airline’s chief executive commented that the airline could not be sustained on taxpayer money indefinitely, justifying the need to significantly adjust its structure to be able to sustain in the long term. This comes after the airline’s parent company IAG accumulated losses of £465 million ($580 million) in the first three months of the year, with expectations of losses in the second quarter being significantly worse.
For this, the airline has designed a new structure that will group cabin crew members in one unit rather than three groups or “fleets” in which they are structured now. At the moment, senior cabin crew are segmented into “worldwide fleet,” which operate long haul aircraft; “Euro fleet” crew operate short-haul flights and “mixed fleet,” made up by younger crew members fly both short and long-haul. The new structure would help the airline improve its operational efficiency as per airline sources.
The British Pilots Association (BALPA) representing almost 90 percent of the airline’s pilot force was quick to respond.
Brian Strutton, its general secretary 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.”
In a letter addressed to BALPA, dated April 28, the Director of Flight Operations Al Bridger informed the union that British Airways will look to reduce its pilot workforce by 1130 crew members, down from a total of 4,346 pilots.
“At this stage, it is anticipated that the headcount reduction resulting from volume adjustment will be 955 (pilots). This is likely to be evenly split between Captains and Co-pilots.
“It is anticipated that the headcount reduction resulting from efficiency changes will be 175 (pilots). This is likely to be evenly split between Captains and Co-pilots,” Bridger laid out.
Other major carriers are prone to the same problems. German flag carrier Lufthansa is estimated to be burning 1 million euros cash every hour according to The Guardian. The same reports estimate the carrier will have 10,000 excess staff in the future. Once things start getting back to normal, operations will be carried out well below pre COVID-19 capacity levels.
On another hand closer to home, both EasyJet and Wizzair have gained access to government support loans that will help them mitigate the impact of COVID-19 on the carrier’s operations. Its long-haul rival Virgin Atlantic has pledged the U.K. government for a £500 million ($622 million) loan, however, this has been rejected by the treasury.
While British Airways could take advantage of a low-interest government loan to maintain its labor force afloat, the airline seems to be confident that after the world starts flying again, they will need to be much smaller, at least for a while.
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