Unions representing British Airways staff have attacked the airline for its ‘gross insult’ to the 12,000 employees ‘it plans to send to the dole’.
BA announced plans to reduce its headcount by a quarter while its Spanish parent company signed a £900m loan with the Madrid government to save jobs at Iberia and Vueling.
BA is part of the International Airlines Group who have said they have no intention of seeking a similar bailout from the British government.
British Airways is seeking to lay off 12,000 members of staff in response to the Covid-19 lockdown despite its parent company International Airlines Group accepting a £900m loan to save jobs in Iberia and Vueling
Unison’s Oliver Richardson, who represents aviation workers said: ‘The fact that Iberian airlines is seeking support from the Spanish government should be welcomed and is a common sense approach to preserving jobs and services, following the immense damage the COVID-19 pandemic has caused to the aviation sector.
‘What is concerning is that the parent company IAG is not seeking a similar solution for British Airways.
‘This is another gross insult to the UK workforce that BA plans to send to the dole. We appeal to IAG to give our members the same support as they are giving to their Spanish employees.
‘Rather than seeking to preserve jobs and workers’ terms and conditions and act for the good of the UK aviation sector, British Airways is guilty of an act of smash and grab opportunism.
‘This is designed to boost its profits in the future and to try to force other operators out of the UK aviation sector.’
The British Airline Pilots Association has warned the industry is facing a ‘tsunami of job losses’.
The Spanish government has announced a £900 million loan for Iberia and Vueling, who are both owned by British Airways’ parent company International Airlines Group.
Brian Strutton, general secretary of the British Airline Pilots Association said: ‘Before coronavirus the UK aviation industry was world leading. But now aviation workers are facing a Tsunami of job losses.
‘There is no more time for delay. The UK Government should follow the example set by others in Europe and around the world, recognise that aviation is vital to the UK economy and keep to the promise made by the Chancellor on 17 March to help airlines.
‘Without swift action, UK aviation will fall behind our global competitors and it simply won’t be there to aid recovery when the demand returns.
‘Aviation will suffer, and so too will the industries that rely on aviation indirectly and our ability to trade on a global scale. That can only be bad for the UK economy.’
Mr Strutton said other governments were supporting their airline industries, which, according to Balpa will ‘distort the global market place and leave the UK floundering.’
He said: ‘The Government should step in to preserve the future of our national airline industry and work with unions and airlines to prevent the loss of the tens of thousands of jobs that are on the line.
‘With full Brexit looming at the end of this year it would be a disaster.’
Union Unite described the IAG of having a ‘two-faced approach’ to its operation.
Oliver Richardson, who represents aviation workers said: ‘The fact that Iberian airlines is seeking support from the Spanish government should be welcomed and is a common sense approach to preserving jobs and services, following the immense damage the COVID-19 pandemic has caused to the aviation sector.
‘What is concerning is that the parent company IAG is not seeking a similar solution for British Airways.
‘This is another gross insult to the UK workforce that BA plans to send to the dole. We appeal to IAG to give our members the same support as they are giving to their Spanish employees.
‘Rather than seeking to preserve jobs and workers’ terms and conditions and act for the good of the UK aviation sector, British Airways is guilty of an act of smash and grab opportunism.
‘This is designed to boost its profits in the future and to try to force other operators out of the UK aviation sector.’
IAG, which owns BA, has signed agreements for £900 million of loans backed by the Spanish government, but the money cannot be used to help its UK airline which is cutting up to 12,000 jobs.
IAG said the money can be used to help its Spanish carriers Iberia and Vueling mitigate the economic impact of the coronavirus pandemic.
There are ‘restrictions on the upstream of cash to the rest of the IAG companies’, the firm added.
IAG has not requested a loan from the UK Government.
It announced this week that up to 12,000 jobs will be lost at BA, representing more than a quarter of the workforce.
On Thursday it emerged that the airline may not resume operations at Gatwick, the UK’s second busiest airport.
In a letter to staff, BA chief executive Alex Cruz wrote: ‘There is no Government bailout standing by for BA.’
The British government has turned to Morgan Stanley for advice on a package of measures to keep its airlines in business during the coronavirus crisis, after warnings that the industry might implode, two sources familiar with the matter told Reuters.
British Airways has suggested it could pull out of Gatwick Airport, pictured, as part of its post Covid-19 cost cutting measures
The Wall Street investment bank, originally drafted in to handle a possible bailout of Virgin Atlantic, has been awarded a broader mandate to examine ways to support the entire airline sector in Britain, the sources said.
‘The situation was more complicated than expected,’ the second source said, adding that any bailout of Virgin Atlantic might prompt other airlines to request state aid.
Morgan Stanley’s expanded role comes as British Airways-owner IAG began a sweeping restructuring and the boss of London Heathrow Airport’s boss warned that Britain risks destroying its aviation sector by not propping up airlines as countries such as the United States and France have done.
Airlines around the world are struggling with the fallout of the coronavirus pandemic, with some such as Germany’s Lufthansa seeking urgent state assistance as air travel has been brought to a virtual standstill, threatening thousands of jobs.
‘We have been clear that we are prepared to enter discussions with individual companies seeking bespoke support as a last resort,’ a spokesman for British Prime Minister Boris Johnson said of British airlines which have exhausted other funding measures to cope with the crisis.
Morgan Stanley declined to comment, while Treasury representatives were not immediately available to comment on the investment bank’s appointment.
Global airline losses from the coronavirus pandemic are estimated at $314 billion, the International Air Transport Association (IATA) estimates.
Virgin Atlantic, which is 51 per cent owned by billionaire Richard Branson’s Virgin Group and 49 per cent by U.S. airline Delta, has warned it will only survive if it gets state aid, while its staff have taken a temporary wage reduction.
Johnson’s government has so far been wary of bailing out travel companies and in March let regional carrier Flybe collapse, marking one of the first big corporate casualties of the coronavirus outbreak.
Morgan Stanley is working closely with Rothschild, which won a similar government mandate earlier this year to handle talks with airlines and other British companies bearing the brunt of the coronavirus pandemic, the sources said.
Any bailout of Virgin Atlantic would only come after all other possibilities, including a sale, had been fully explored, one of the sources said.
Unions have asked why IAG is cutting jobs at British Airways while leaving other airlines that form part of the group untouched
A spokeswoman for Virgin Atlantic said it was exploring all available options to obtain additional external credit, adding it was working with Houlihan Lokey on private sector funding and ongoing discussions with stakeholders were ‘constructive’.
Meanwhile, Branson and the Virgin Group were committed to the airline and were not looking to sell it, a representative for the group said on Friday.
But if no bailout is granted and Virgin Atlantic ends up collapsing, then the government will need to review the competitive landscape on transatlantic flights as British Airways would emerge as a winner, another source said.