MIAMI– British Airways (BA) has today announced it will cut 12,000 jobs in the wake of the Coronavirus pandemic.

The International Airlines Group (IAG), who owns British Airways stated that it needed to implement “a restructuring and redundancy program” until the demand for air travel is similar to that of next year.

This accounts for around 28.5% of the 42,000 strong people that work for the airline.

IAG mentioned in a statement that this process is subject to consultation.

“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.”

LONDON, UK:
British Airways Boeing 787-9 arrives at London Heathrow on 30 September 2015

British Airways’ CEO Alex Cruz also added to the remarks of IAG in a letter to its staff.

 “Our very limited flying schedule means that revenues are not coming into our business. We are taking every possible action to conserve cash, which will help us to weather the storm in the short-term.

“We are working closely with partners and suppliers to discuss repayment terms; we are re-negotiating 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.  

“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. Any money we borrow now will only be short-term and will not address the longer-term challenges we will face.”

The news of job cuts comes after staff at British Airways had been awaiting updates regarding their job security.

It was to the belief of those in the unions and in the company itself that there would only be suspensions of job roles as opposed to redundancies as a whole.

This step is not wholly surprising for IAG given its revenues dropping 13% to around £4b in Q1 2020.

On top of this, the group has also recorded a £466.3m loss as opposed to its £117m profit for the same period last year.

As well as the Coronavirus pandemic, IAG conceded that it was hit with a £1.1bn charge for the year due to over-hedging on fuel and foreign currency.

IAG Follows Suit


In the industry, with other airlines cutting down operations, it was only a matter of time before the likes of IAG would have to follow suit.

First intercontinental flight of a British Airways Boeing 787-8 about to touch down, Toronto-Pearson Airport with City Centre Mississauga looming in the background.

easyJet has laid off its 4,000 UK-based cabin crew for two months with Australian carrier Qantas placing 20,000 staff on leave.

Air Canada has also done the same for 15,200 of its employees.

These job cuts are also a testament to how much more volatile the industry is about to become.

Norwegian Air announced that it could run out of cash by mid-May as well as stating that full operations would not run until 2022 at the latest.

Last week, Lufthansa reported a first quarterly operating loss of €1.2b and announced even higher sums for Q2.

After the crisis, Lufthansa will probably have a fleet that is 100 aircraft smaller. According to aero.de, this results in a calculated redundancy of 10,000 employees.

Lastly, following the administration status of Flybe (BE), UK’s Civil Aviation Authority (CAA) revoked its Operating (OL) and Route Licences in effect on April 30, 2020.

British Airways’ Investment Program in Trouble?


British Airways pushed announcements over its £6.5bn investment last year in order to mark the carrier’s centenary celebration.

This would see the airline receiving 73 aircraft over the next five years as well as refitting 128 of its existing aircraft with new interiors and other features such as high-speed WiFi updates to its mobile apps and biometric technology.

Such cuts could potentially mean a deferral to its delivery target as well as to the other elements it aims to invest in.

Heathrow, British Airways Heritage BEA livery on an Airbus A319, to celebrate BA centenary celebrations, March 2019.

It had received 18 aircraft in the last 18 months or so, but with collapsed demand, this delivery rate will no doubt be lower.

In this investment program, there have been new route additions that have been made such as Portland which is due to begin on June 1 this year, Antalya in a few days as well as Podgorica & Kosovo on July 4.

Overall, it remains clear that while 12,000 people will unfortunately lose their jobs, the airline is thinking more about survival, especially during a pandemic which is as volatile as this.

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