British Airways is set to make up to 12,000 workers redundant on the back of Covid-19 restrictions.
The airline’s owner International Airlines Group (IAG) announced the planned job cuts as it revealed that revenues plunged 13% in the first quarter of 2020.
ABN TV reports, In a letter to staff, British Airways chief executive Alex Cruz said there is no longer any “normal” and that the airline cannot expect taxpayer money to offset salaries indefinitely.
It comes after 30,000 workers were placed on the Government’s furlough scheme – covering up to 80% of their wages using public funding.
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In a statement, IAG said: “In light of the impact of Covid-19 on current operations and the expectation that the recovery of passenger demand to 2019 levels will take several years, British Airways is formally notifying its trade unions about a proposed restructuring and redundancy programme.
“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 previously announced, British Airways has availed itself of the UK’s Covid-19 job retention scheme and furloughed 22,626 employees in April.”
The move will potentially include ground staff, cabin crew, and pilots, which will be placed on consultation.
It comes as the airline continues to run a “limited” service for essential journeys, with plans to restart flights to Tel Aviv next month.
For those with upcoming flights booked, the airline is advising passengers to check for updates on ba.com.
Today’s news comes just 48-hours after it emerged Virgin Atlantic is on the hunt for a new investor as it remains in talks with the UK government about a coronavirus-related bailout.
Virgin Atlantic said talks were “ongoing and constructive”, but added that it is also looking at raising cash from the private sector.
“Because of significant costs to our business caused by unprecedented market conditions which the Covid-19 crisis has brought with it, we are exploring all available options to obtain additional external funding,” the airline said.
Sir Richard Branson said in an open letter to staff on Tuesday that he was asking the government for a commercial loan, believed to be £500million.
In the blog post, he said: “We will do everything we can to keep the airline going – but we will need government support to achieve that”.
He added that his luxury island resort Necker Island could be used as collateral to help secure state aid for Virgin Atlantic.
The Department for Transport said: “The aviation sector is important to the UK economy, and firms can draw upon the unprecedented package of measures announced by the chancellor, including schemes to raise capital, flexibilities with tax bills, and financial support for employees.”
A spokesperson added that they were willing to consider individual firms’ situations after all alternatives had been explored, “including raising capital from existing investors“.
In March, Chancellor Rishi Sunak wrote to airlines and airports urging them to find other forms of funding, and that the government would only step in as “a last resort” during the coronavirus crisis.
Sunak has since given £600million to EasyJet from the coronavirus bailout fund and said arrangements will be made on a case-by-case basis.
Sir Richard offered to inject £250million into the group last month, with most of that going to Virgin Atlantic.
Sir Richard’s Virgin Group currently owns 51% of Virgin Atlantic, while the US airline Delta owns the other 49%.
The move came after the group’s airline in Australia entered administration.
Virgin Australia is seeking new buyers and investors, after failing to get a loan from Australia’s government.
