Coronavirus: British Airways looks at cutting up to 12,000 jobs

Passenger capacity for April and May slashed by 94% compared with same period in 2019

FILE PHOTO: British Airways planes are seen parked at Bournemouth Airport, as the spread of the coronavirus disease (COVID-19) continues, Bournemouth, Britain, April 1, 2020. REUTERS/Paul Childs/File Photo
Beta V.1.0 - Powered by automated translation

Up to 12,000 jobs are at risk at British Airways as it faces up to the economic fallout of the coronavirus pandemic, parent company IAG warned on Tuesday.

IAG also reported first-quarter losses before exceptional items of $580 million (Dh2.13 billion), compared with a profit of $146m a year ago.

The airline has been largely grounded in tackling the coronavirus and is operating a handful of flights instead of hundreds.

“British Airways is formally notifying its trade unions about a proposed restructuring and redundancy programme," IAG said.

Passenger aircraft, operated by British Airways, a unit of International Consolidated Airlines Group SA (IAG), sit with their engines covered behind a newly-built temporary hoarding at the closed London City Airport, operated by London City Airport Ltd., in London, U.K. on Wednesday, April. 22, 2020. U.K. inflation slowed in March as the nation entered lockdown and oil prices continued to tumble. Photographer: Jason Alden/Bloomberg

“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."

Passenger demand would take "several years" to return to 2019 levels, IAG said.

IAG, which also owns two Spanish carriers, flagship Iberia Airlines and the budget Vueling Airlines, saw its shares lose 2.2 per cent as preliminary results showed first-quarter revenue fell by 13 per cent.

The company said it had reduced passenger capacity for April and May by 94 per cent compared with the same period in 2019.

In a letter to employees on Tuesday, British Airways warned that redundancies were possible but did not mention any figures.

“We are working closely with partners and suppliers to discuss repayment terms," it said.

"We are renegotiating contracts where possible and we are considering all the options for our current and future aircraft fleet.

“All of these actions alone are not enough.”

“We have informed the government and the trade unions of our proposals to consult over a number of changes, including possible reductions in headcount.

“We will begin a period of consultation, during which we will work with the trade unions to protect as many jobs as possible.”

Alex Cruz, chairman and chief executive of British Airways, wrote his letter to staff a few hours before IAG released details of the losses.

“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,” Mr Cruz wrote.