British Airways is preparing to cut almost 30 per cent of its 42,000 workforce as the coronavirus crisis wreaks more damage on the battered aviation sector.I
IAG, the airline’s parent company, warned that a return to 2019 passenger levels would take “several years” and announced plans to cut up to 12,000 jobs.
In a letter to BA staff, chief executive Alex Cruz said that “the outlook for the aviation sector has worsened further” in the past few weeks, adding: “we must take action now”.
The move comes as carriers have moved from furloughing workers to making redundancies with optimism for a fast rebound evaporating.
SAS, the Scandinavian airline, said on Tuesday that it would permanently cut about half of its workforce — up to 5,000 full-time positions — as it warned it would take “some years” for its business to go back to normal.
Lufthansa, the German airline group, is considering filing for creditor protection, according to its cabin crew union.
Norwegian Air Shuttle warned this week that the bulk of its fleet is likely to remain grounded for the next 12 months. The company warned that a full recovery would not take place until 2022, laying bare the scale of the crisis engulfing the industry.
In his letter, seen by the FT, Mr Cruz wrote: “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 face.”
He added that the airline did not know when countries would reopen their borders or when the lockdowns would lift.
“The scale of this challenge requires substantial change so we are in a competitive and resilient position, not just to address the immediate Covid-19 pandemic, but also to withstand any longer-term reductions in customer demand, economic shocks or other events that could affect us,” he wrote. BA will now consult on the redundancies with its three unions — Balpa, Unite and GMB — over the next 45 days.
The job cuts at BA will sound alarm bells in the Treasury, as it signals that the coronavirus outbreak is likely to leave a deep scarring effect on parts of the UK economy even after current lockdown restrictions are lifted.
