International Airlines Group (IAG) today said a redundancy consultation at British Airways could lead to 12,000 people losing their jobs.
IAG said British Airways is formally notifying its trade unions about a proposed restructuring and redundancy programme.
“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,” IAG said.
In April, British Airways furloughed 22,626 staff using the UK government’s coronavirus job retention scheme.
The airline group said it had reduced passenger capacity in April and May by 94 per cent compared to last year.
“Recovery to the level of passenger demand in 2019 is expected to take several years, necessitating group-wide restructuring measures,” IAG said.
IAG said today it had €9.5bn (£8.3bn) in cash and undrawn general and committed aircraft finance facilities at the end of March, including €6.95bn of cash, cash equivalents and interest-bearing deposits.
The British Airways-owner said it lost €535m before exceptional items in the first quarter, compared to a profit of €135m the previous year.
It also said it was hit by an exceptional charge of €1.3bn resulting from the ineffectiveness of its fuel and foreign currency hedges for the rest of 2020.
IAG said all of the reduction in its operating result for the quarter came in March.
The majority of the reduction in IAG’s operating result was incurred by British Airways, followed by Iberia and Aer Lingus, the group said.
IAG said its operating loss in the second quarter is likely to be “significantly worse than in the first quarter, given the substantial decline in passenger capacity and traffic”.
The British Airline Pilots Association’s (BALPA) general secretary Brian Strutton said:
“BA pilots and all staff are devastated by the announcement of up to 12,000 possible job losses in British Airways.
“This has come as a bolt out of the blue from an airline that said it was wealthy enough to weather the COVID storm and declined any government support.
“BALPA does not accept that a case has been made for these job losses and we will be fighting to save every single one.”
Richard Burge, chief executive of London Chamber of Commerce and Industry, said: “This is very sad news indeed to see such a large amount of staff set to lose their jobs. And a blow to London, its airports, supply chains, & air cargo movement.
“As we ease from lockdown, and when we finally defeat covid-19, British Airways will play a key role in the economic recovery. I’m sure we see better news for them and staff over the course of time.”