Crisis at British Airways as U.K.s flag carrier plans to lay off 12,000 staff

©British Airways

Having posted its worst-ever quarterly loss, British Airways (BA), part of IAG, has announced its intention to lay off over 25% of its 45,000-strong workforce. Alex Cruz, BA CEO, has written to staff making it clear that there is little point in continuing with the U.K. government furlough scheme where 80% of staff wages up to a maximum of £2,500 per month are covered by the U.K. taxpayer as that could never be  a long-term solution and there was no sign of any bailout from the British taxpayer.

In his letter, Cruz said: “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. There is no Government bailout standing by for BA and we cannot expect the taxpayer to offset salaries indefinitely. We will see some airlines go out of business.”

Currently, in Europe, Germany’s Lufthansa is preparing to file for bankruptcy if it is unable to secure an €8 billion rescue package from the German Government. Virgin Atlantic has been turned down for a £500 million U.K. taxpayer loan and Sir Richard Branson is now actively seeking private investment in the long-haul, trans-Atlantic carrier.

IAG has also announced first-quarter revenue had fallen 13 per cent with operating losses of £535 million, while also being hit by a €1.3 billion charge for financial hedges on fuel and foreign currency. IAG, which also owns Iberia and Aer Lingus, has also warned that with passenger numbers falling by 94 per cent, “The group expects its operating loss in the second quarter to be significantly worse than in the first quarter. Recovery to the level of passenger demand in 2019 is expected to take several years, necessitating group-wide restructuring measures.”

BA has opened talks with trade unions, which said they were devastated and pledged to fight the job cuts. (£1.00 = €1.14 or US$1.24 at time of publication.)

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