British Airways could slash up to 12.000 jobs as it has started a restructuring and redundancy program in response to the Covid-19 crisis, parent company International Airlines Group (IAG) confirmed on April 28. The restructuring will also affect the Group’s other airlines.
British media were already speculating on massive reductions. In an update on its Q1-results, IAG says that recovery from the current situation will take several years. This echoes the same reactions from elsewhere in the industry, with SAS announcing a reduction of staff of some fifty percent today.
BA has formally notified unions about the proposal, which will be 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”, IAG says. Already 22.626 employees are furloughed.
British Airline Pilots’ Association (BALPA) reacted on Twitter, saying it is ‘devasted’ by the announcement. “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 will be fighting to save every single one.”
The update doesn’t specify the situation at IAG’s other airlines Iberia, Vueling, LEVEL, and Aer Lingus, only saying that a Group-wide restructuring will be necessary. Also absent from the release is the status of the take-over of Spanish airline Air Europe which originally was set for completion this Spring.
IAG will publish more detailed results of Q1 on May 7 but said that after two normal months demand fell off a cliff in March. RPK’s were 15.2 percent lower, load factors -4.3 percent to 76.4 percent.
The operating result before exceptional items was EUR -535 million compared to a 135 million profit last year. Pre-tax profit was impacted by a EUR 1.3 billion charge as the Group got its hedging of fuel and currencies wrong. Revenues were EUR 4.6 billion, down from 5.3 billion.
IAG has suspended its guidance for FY20, adding that Q2 will be ‘substantially worse’ from Q1. Total cash and committed aircraft finance facilities amount to EUR 9.5 billion, of which EUR 6.95 billion in cash.