British Airways (BA) today launched a consultation process likely to result in 12,000 layoffs among its 42,000 staff. The move was confirmed in a statement issued by the UK carrier’s parent group, IAG, which also owns Spain’s Iberia and Ireland’s Aer Lingus.
The airline has requested talks with trade unions and it is unclear, for now, how many of the company’s approximately 4,500 pilots and 16,000 cabin crew might lose their jobs. Pilots union BALPA said it intends to oppose the proposed layoffs.
“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 government support,” said BALPA in a statement. “BALPA does not accept that a case has been made for these job losses and we will be fighting to save every single one.”
Announcing preliminary results for the first quarter, IAG said total revenues fell by 13 percent, to €4.6 billion ($4.9 billion), compared to €5.3 billion ($5.7 billion) in the same period in 2019. Mainly due to the impact of a €1.3 billion ($1.4 billion) hit resulting from adverse hedging on fuel and foreign currency rates, the group incurred a pre-tax loss of €535 million ($580 million). Its statement indicated that the majority of this loss was accounted for by BA.
During the first three months of 2020, passenger capacity, in terms of available seat kilometers, dropped by 10.5 percent during the first quarter, while revenue passenger kilometers declined by 15.2 percent. Seat load factors fell by just 4.3 percent, to 76.4 percent.
IAG indicated that much of the decline occurred during March. The group has cut passenger capacity by 94 percent in April and May.
“In the last few weeks, the outlook for the aviation industry has worsened further and we must take action now,” said BA chief executive Alex Cruz in a statement headlined "Preparing for a Different Future."
“There is no government bailout standing by for BA and we cannot expect the taxpayer to offset salaries indefinitely,” Cruz added. “Any money we borrow now will only be short-term and will not address the longer-term challenges we will face.”
Earlier this month, BA announced that it was using the UK government’s job retention scheme to furlough 22,626 employees.