UPDATED: See bottom of article
Yesterday Alex Cruz, CEO of British Airways, sent a sobering letter to their staff. This comes hot on the heels of the preliminary IAG results for the first quarter of 2020.
In the results, BA’s revenue was down by 13% to give a loss of €535 million compared to the same period last year where they made a profit of €135 million. January and February saw normal operations, with only March affected by the current issues. This goes to show the severity of the crisis as the major country lockdowns and travel restrictions only started around the second week of March.
We expect further details when they formally release the results next week. The results are also affected by their currency and fuel hedging for 2020 which was ineffective given the dive in sterling as well as oil prices. This resulted in an additional exceptional charge of €1.3billion.
In April and May, British Airways have cut passenger capacity by 94% of what they had originally planned. Their only flights operating are those for repatriation and essential travel.
BA are trying to reduce costs on the short term with talking to suppliers, renegotiating contracts and looking at their future fleet plans. However, this will not be enough given the long term outlook for a slow recovery for aviation and tourism.
In the letter to staff Alex says that:
“ 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. Your views matter and we will listen to all practical proposals. “
In the preliminary results, it is stated that whilst it is in the consultation phases, the reductions are likely to affect most areas within BA and involve a reduction of up to 12,000 staff. BA are planning to restructure and in the process make staff redundant.
We can now reveal that British Airways would like to combine their three cabin crew fleets into a single fleet. Currently, there are three cabin crew fleets at Heathrow on different contracts with different pay and conditions. This is in addition to Gatwick crew and those operating at London City for CityFlyer, BA’s subsidiary. BA has now made clear that they are looking to at least combine World Wide, Mixed Fleet and Eurofleet into one single fleet. It is not clear if any of the fleet amalgamations will affect cabin crew based at Gatwick or London City yet. The next step will be negotiations with the cabin crew unions.
This is very sad to hear, but unfortunately, I think this is the first of many such announcements across the airline business.
15 comments
It is very sad news as you say. But rather odd as suggested by BALPA the pilots union that only a few weeks ago they were boasting about cash reserves of £9B and no need to ask for government money to suddenly go to this must be horrendous news for the BA staff.
As you say, such dreadful news for so many staff. What’s everyone’s view on the future “shape” of BA? Will they drop some routes to focus on higher revenue ones? Is it the end for the A380 and/or 747? What about the “order” for the 737 MAX? I saw one “pundit” on BBC News suggesting a part nationalisation but I wonder if the links with Qatar might be strengthened?
I know it’s all speculation but still interesting to consider the options, as I’m sure management must be doing.
I think at the moment it’s very hard for airline to plan as it is so unknown. The A380 is definitely not looking in a great position but it depends on what their strategy is. They may go for bigger aircraft but with less frequency. I really hope the B747 manages to hang on for a few more years!
Michelle,
Thanks for the update on poss BA cc amalgamation, Have to say based on my executive experience that this is just an opportunity for BA (IAG) to address its long standing issues.
To be blunt – the corporate “back of the fag packet” calculations are being/ have been done and those who are going are going.
Real shame and I genuinely feel for anyone affected – one can only hope some senior heads role too!
Hi Michelle
Sad news indeed.
I’m not clear what the differences are between the three ‘fleets’, nor the purpose of having them.
What is the expected outcome/effect from moving to a single ‘fleet’?
They originally had two fleets one short haul and one long haul. They bought in people on cheaper contracts even within these fleets but they still had the same terms and conditions such as rest periods down route. All of which were very generous. So mixed fleet were created but with lower pay and less time down route etc. Ideally BA want everyone on this contract as a) it’s much cheaper and b) it’s much more flexible when there is disruption if everyone works to the same rules. It was inevitable they would do this at some point. Now is the perfect opportunity for them to push this. Hopefully they let WW stay on their old salary but just change T & C if they want to stay on. MF salary is shockingly low.
Thanks for the clarification
As worldwide and eurofleet retirements occurred, replacements would be into mixed fleet. This is just speeding up the process. This would be fine if training was upped to the old standards of worldwide and pay and conditions were along those lines too. However, whilst Walsh and his puppet Cruz are at the helm of BA, pigs may fly!
Written by the wife of a BA captain and forwarded to me by a loyal BA cabin crew member for 25 plus years…
As valid as a number of your points and views are, any BA senior captain will have been earning a fantastic salary with very genreous staff travel benefits (first priority worldwide for less than £200) for many years.
I can’t feel as sorry for him as the thousands of lower level BA staff that will end up not paying their mortgages or rent as a result of vast cuts across the airline.
BA have been messing with cabin crew terms and conditions for years. Some years back when the cabin crew struck to maintain their terms BA pilots stabbed them in the back and worked as crew to keep planes flying and weakening their bargaining position. I wonder now how many crew will be sad to see some pilots getting the chop
Lets not forget it was only summer last year that our fantastic BA pilots held the airline to ransom for their pay rises forcing thousands of averagely paid people to cancel or change their holiday plans, often costing financial or emotional issues. Holding out for the same percentage rise as others had already accepted. But think for a minute. the same percentage rise equates to vastly different gains when one earns £20k and one earns £160k
Hard to feel as sorry as the above letter would like us to.
Very few people like redundancy, so I can understand the bitterness of the BA Captain’s wife.
One of my former flight instructors from San Diego is now a BA 777 first officer. She was on 60% roster, so flew 2 trips per month, prior to the current disruption. She can bid for which trips she wants to do. Were she working 100% (probably 3.5 trips per month) she would earn £130,000 per annum. In 2018, I asked her whether she’d bother to become a captain, if offered, and she said yes, because she’d get £170,000 a year. Gaining a commercial licence is a rigorous process, and there are biannual checks; with pretty amazing pensions, staff travel etc, I’d say the rewards are fantastic. I agree that it sounds like the husband really puts himself out; when I was flying corporate jets as a captain with 25% of the remuneration, I did exactly the same. All sorts of people enjoying a fraction of her husband’s privileged benefits do the same. It’s called doing what you’re paid for.
Doing what your paid for is something NHS staff, hospital porters, dustmen, care workers, emergency services and various low paid key workers are doing right now for all our benefits, they are the ones who are “really” going above and beyond. With the very real chance they might die. They were never able to jet off the Capetown in First class for £175. Thats only in their dreams
Please don’t start me off – totally agree although the current situation is far from their remit. I refer to life before, and as you state probably now & beyond? “There is no such thing as a bad soldier, only a bad officer”!!!!
It is not as though they show much loyalty to their customers either. In my opinion, BA have granted probably the worst “status extension offer” due to Covid-19 by any major airline. They clearly don’t want their passengers back either!
Top notch crew were the very last reason to fly BA, if their ranks are depleted any further and I have no doubt they will be.
Walsh costs about the same a year as 300 mixed fleet crew, he was supposed to be gone, it’s a pity he hasn’t.
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