[SimonS1]

On the BBC now. Doesn’t sound good at all.

https://www.bbc.co.uk/news/business-52462660

[Mark Caswell]

British Airways plans up to 12,000 redundancies

[canucklad]

And so it begins. Sadly and very concerning those who are going to lose their jobs are likely not to return to any form of employment this side of 2021
And it’s only going to get worse. For those of us who can remember the days of high unemployment I really worry for UK Plc because the knock on effect of these inevitable reduncies will make the early 80s seem like a walk in the park

[AlanOrton1]

I don’t think it will just be the U.K.

I suspect we’ll see other airlines, and potentially industries across many countries, follow suit.

Horrible consequences for those affected at BA but I suspect IAG are adopting a degree of realism / practicality to what the near to mid term future holds and reacting accordingly.

Though given their woeful relationship with the unions you can’t help but wonder if they’ve gone in with a particularly high number, expecting the actual number to be significantly less.

[MarcusGB]

It is indeed extremely sad and awful to see Aviation failing as this, Worldwide. So many Airlines have failed in the UK in recent years.
From Virgin Australia, to Cathay In HKG, it seems the Airlines with a national Governmental stake in, will be those that survive.

Tourism has come to a halt, not just Business travel, and so many differing policies on Borders, does not make it easy to work back up from.
The Pandemic also has come in waves, and not really yet hit some continents or countries in the poorest parts of The World, as we have seen in others.
Think of all the hotel employees, shops, transportations, small business in the cities Worldwide, individuals livelihood has been wiped out in weeks.

And this not caused by their own faults, or business ethos, but linked to another virus transferred from the animal to the human chain of living.
C4 News this eve, had an excellent interview detailing where the recent viruses had all emerged from, all interferences in the animal to human chain, not just for food, but in the failures of respect towards animals, and nature.

Travel and Tourism related workers, must all be devastated Worldwide, and my thoughts, and great empathy go out to them.

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[ImissConcorde]

AlanOrton1 I won’t be at all surprised if “up to 12000” becomes “at least 12000” IAG is being realistic and there will be a lot of casualties.

[capetonianm]

Very difficult and challenging times for so many, globally and in many spheres of employment. The very poorest in society probably have nothing more to lose, those in the middle are the ones I feel so sorry for, and the rich will lose value on paper but it’s not going to seriously dent their life style.
From our perspective we may think the airline/travel/tourism sectors are the worst affected, as they are so visible, but many other sectors will never recover from this.
I am thankful that my working days are over, but I have many friends and family who are not so fortunate, who need an income, and for all whose livelihoods have been affected by this latest scourge, or who have lost loved ones, I feel a great sorrow.

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[Ah,Mr.Bond]

Let me guess, the honest hardworkers will be chucked aside while the inept will remain.

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Woodpecker, BugAdvisor

[rferguson]

Sad times indeed.

However, BA have stated ‘up to’ 12,000 redundancies and having an idea of how BA works when it comes to IA negotiations i’d imagine they have gone for the most pessimistic headline possible.

I am under absolutely no illusions that BA is in trouble and will need to make cuts – deep cuts. And that the possibility of going out of business is there for any airline in the world right now. But I also know that BA is bold and opportunistic when it comes to benefiting from a bad scenario.

The sad thing is that because of the way BA has treated its staff in the past they have zero goodwill from employees and a lot of suspicion. AC’s assertion that BA is a ‘tight knit family’ could not be further from the truth. It’s funny because for friends at Virgin it couldn’t be more different. They really are working together to try get through the crisis and the staff are very defensive of the company and take at face value what the management/owners tell them.

So BA has started the firing gun in terms of getting rid of staff long term. Well, for many of us we have known that has been the aim for quite a while. For those of us on the legacy contracts we have been walking on thin ice for a decade or more knowing that BA will make a move as soon as the perfect storm gives them the opportunity – which is now. How it will pan out none of us know. I imagine BA has picked this time in the middle of a pandemic to ‘restructure’ in order to get the greatest likely result. Unions will have their hands tied as staff have the threat of losing jobs over their head. BA will easily be able to force through long sought changes to T&C’s. Not just cabin crew but pilots as well. It’s much easier to do it now – at the very worst time with the very worst outlook than to take a ‘temporary measures for temporary crisis’ approach and wait and see whether forward bookings pick up and what the long term forecast looks like after the immediate crisis has ended. If after the worst of this pandemic things start returning to a ‘new normal’ and forward bookings don’t look as hideous as predicted now BA may have a weaker arm in dealing with staff and unions.

The other part of AC’s letter that I find interesting is that the UK government is not there for BA. Well….we know why that is! IAG and BA have both been actively saying they don’t WANT government aid. No doubt in the hope Virgin and Norwegian will fail without it. But to then make a point in the letter to staff that there is no help there for BA when we all know what BA’s view is on that feels a bit of a kick in the teeth.

And then we have other aspects that don’t make a whole lot of sense for an airline desperately scraping together every penny to survive. Like the purchase of Air Europe. If you really need every penny does it make sense to continue the one billion euro purchase of a spanish airline instead of walking away from it (as LOT just did from Condor). No, IAG hasn’t walked away. But opportunism has knocked on the door again – it is reported IAG have now made a new lower offer for Air Europe.

The newer Mixed Fleet crew are actually in the most precarious position in terms of losing their jobs altogether. BA was not silly in the wording of their contracts and they have a clause which basically allows BA to lay them off with a weeks notice at any time.

I’m quietly confident that any non-voluntary job losses (among cabin crew anyway) will be minimal. I’d imagine BA will first offer a voluntary redundancy package. The ‘average’ age of the 10,000-odd legacy crew is 47. Over half are on some form of part time contract. And around half commute to LHR from places far and wide. I’d imagine given the option of VR or accepting MF-esque T&C’s a large amount will take VR.

Personally, i’ll wait and see what the options are. As I mentioned at the beginning of this post I always knew that things would come to an end for us on the legacy contracts at some point so I had started making plans already. I very much still enjoy my job and appreciate all it gives me. On the other hand, maybe it’s time to try something new.

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[rferguson]

Actually as I literally finished typing the above we were emailed with a brief outline of the proposal for cabin crew that BA is putting to the unions.

– closing the three LHR fleets and creating one single ‘team’ at LHR. The three fleets are currently Worldwide (legacy c9,000 staff), Eurofleet (Legacy c2000 staff) and Mixed Fleet (New Contract c5500 staff). Mixed Fleet/new contract is actually the largest cabin crew workgroup when taking into account Head Count Equivalent as most legacy crew are on some form of part-time contract (75/50/33%) and nearly all Mixed Fleet are full time.
– all crew will operate a mixture of longhaul and shorthaul. Legacy crew only currently operate longhaul OR shorthaul. Mixed Fleet as the name suggests operate both.
– a new, simplified onboard supervisory structure.

With these proposals it is almost guaranteed that many Worldwide legacy crew will take Voluntary Redundancy.

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[AlanOrton1]

Very insightful post rferguson.

It will be a sad day when the legacy crews by and large become a thing of the past. I’ve always felt their service, 95% of the time, has been excellent and something that stands BA cabin crew out from others.

As a business though, I can completely see where BA are coming from on this one, given the disparity in pay, T’s & C’s etc.

Living about 30 mins from LHR and with BA offering non stop flights to all the business destinations I need to travel to, I’ll still continue to use them as from a business perspective they are my best option. I’ll miss the legacy crew, though as BA mgt doubtless know, most travellers will continue with them regardless.

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[MartynSinclair]

Thank you rferguson for your usual eloquently written piece about the current position at BA. I recall previous posts where it has been suggested BA were waiting for an opportunity to do the ‘big restructure’. As you suggest, perhaps COVID 19 has now provided the opportunity. I hope what ever options you are faced with over the next few months, it will keep you in the profession you clearly still love after so many years.

Two question, the article posted by Mark at the top of the thread states:

“Pre-tax profit was impacted by an exceptional charge of €1.3 billion relating to fuel and foreign currency hedges for the rest of 2020.”

In your post RF you mention:

“If you really need every penny does it make sense to continue the one billion euro purchase of a spanish airline instead of walking away from it”

1. These are huge figures, do they have any serious impact on the balance sheet?

2. regarding the fuel and foreign currency hedges – does this mean in simple terms, after reading the last 100 spins of a roulette wheel, a researcher put their chips on black in stead of red??

1 user thanked author for this post.

ImissConcorde

[PhilipHart]

“IAG and BA have both been actively saying they don’t WANT government aid. No doubt in the hope Virgin and Norwegian will fail without it.”

Well, according to an article today in Head for Points – Will the British Airways / American Airlines joint venture be broken up if Virgin Atlantic goes bust? – that is not something IAG should be wishing for at all.

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sparkyflier

[Inquisitive]

I only hope that BA and all the good companies furlough the employees with some cash assistance instead of terminating.

And when the situation gets better, the willing employees can rejoin.

[mancvboy]

My understanding is that airlines buy or fix a high proportion of the price of their fuel up to two years ahead. So BA have now got a double whammy in that they cant use most of that fuel and have to sell it back into the market at at a much reduced price. Similarly they will forward sell/buy a proportion of currency receipts/ payments to offset exchange risk and will have to close out those contracts at a cost. So its not gambling, as you imply, but normal business prudence to reduce uncertainty.

[Author]

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