British Airways plans to cut the jobs of a quarter of its pilots and could abandon Gatwick Airport altogether in a bid for post-coronavirus survival, it was revealed today.
The news was revealed in a memo, written by the head of BA’s Gatwick operation and seen by BBC News.
This comes as it was revealed the beleaguered airline is seeking to cut pilot numbers by a quarter as it slashes costs to weather the coronavirus crisis, according to a separate letter sent to union leaders.
The airline has already been crippled by the outbreak and just two days ago, owners IAG announced some 12,000 redundancies – after it furloughed more than half of its 45,000 workers.
British Airways planes seen parked up on March 31 at Gatwick airport
Will air travel get more expensive?
According to analysis by US-based Dollar Flight Club, we can expect lower airfare prices in the short term, before prices rise dramatically by 2025.
Through to 2021, the flight deals service found there would be a 35 per cent decrease in prices on average, as airlines desperately attempt to draw customers back in.
But over the next four years, prices would then rise by over a quarter above pre-crisis levels as demand outstrips a significantly reduced supply.
The data indicates more severe drops and subsequent price hikes than were experienced either during 9/11 or from the financial crash.
‘Passengers in smaller or short-haul markets can expect significant cuts in scheduled air service as airlines downsize operations,’ read the report.
‘This will make it significantly more expensive and harder for these passengers to travel. In these markets, we can expect train and bus travel to see significant growth.’
The club found that over the next year, customers could get a roundtrip from Los Angeles to London for $329, or a roundtrip from New York to Amsterdam for $278.
Under the plan, BA would cut 1,130 captain and co-pilot jobs from its headcount of 4,346, the IAG-owned airline’s head of flight operations told the BALPA union in the letter.
The letter, written on April 28, reads: ‘In a short space of time the situation has significantly deteriorated.’
It adds that BA may yet be forced to suspend the few services still running from London Heathrow.
‘There are no clear signs of improvement in air passenger demand,’ it adds.
A spokeswoman for BA did not immediately return calls and messages seeking comment on the planned cuts, which were first reported by Sky News.
BALPA General Secretary, Brian Strutton said: ‘As far as BALPA is aware there is no truth in the rumour that British Airways will pull out of Gatwick and there has been no indication of that from BA to us. However, it is on our list of questions to ask them.’
In a statement on Tuesday, IAG said: ‘In light of the impact of Covid-19 on current operations and the expectation that the recovery of passenger demand to 2019 levels will take several years, 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.
‘As previously announced, British Airways has availed itself of the UK’s Covid-19 job retention scheme and furloughed 22,626 employees in April.’
Passenger numbers are expected to halve compared to 2019, with the likes of Flybe already going into administration before full lockdown measures were in place in Britain.
In a letter written on April 28, British Airways CEO Alex Cruz said the airline was ‘preparing for a new future’.
He wrote: ‘Yesterday, British Airways flew just a handful of aircraft out of Heathrow. On a normal day we would fly more than 300.
‘What we are facing as an airline, like so many other businesses up and down the country, is that there is no ‘normal’ any longer.’
His letter continued: ‘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.’
‘Preparing for a different future’: British Airways CEO pens letter warning of uncertain times ahead
Alex Cruz, British Airways’ CEO, told staff in a letter the airline company was taking ‘every possible action to conserve cash’
Letter to colleagues from Alex Cruz, Chairman and CEO at British Airways
Yesterday, British Airways flew just a handful of aircraft out of Heathrow. On a normal day we would fly more than 300. What we are facing as an airline, like so many other businesses up and down the country, is that there is no ‘normal’ any longer.
The global aviation body, IATA, has said that the industry has never seen a downturn this deep before, and that full year industry passenger revenues could plummet 55% compared to 2019, while traffic falls 48%. Many airlines have grounded all of their planes. Sadly, we will see some airlines go out of business with the resulting job losses.
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.
We do not know when countries will reopen their borders or when the lockdowns will lift, and so we have to reimagine and reshape our airline and create a new future for our people, our customers and the destinations we serve. 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.
The scale of this challenge requires substantial change so we are in a competitive and resilient position, not just to address the immediate Covid-19 pandemic, but also to withstand any longer-term reductions in customer demand, economic shocks or other events that could affect us. However challenging this is, the longer we delay difficult decisions, the fewer options will be open to us.
I want to pay tribute to the thousands of British Airways colleagues who are playing a vital role in the global response to the Covid-19 crisis. Whether you are supporting our repatriation flights or the transport of essential cargo; or one of the hundreds of colleagues volunteering with organisations such as the NHS, you have my sincere respect and thanks.
This has been a difficult message to write and one I never thought I would need to send. I know how tight-knit the BA family is, and how concerned you will be, not just for yourself but for your colleagues, too. We must act decisively now to ensure that British Airways has a strong future and continues connecting Britain with the world, and the world with Britain.
Furloughed cabin crew member Karen said she was ‘heartbroken,’ over the news on LBC on Tuesday evening.
She said: ‘I’m cabin crew, I’ve been there thirty years and to hear from you that me and millions of my colleagues may be losing our jobs is just heartbreaking.’
General secretary of pilots’ union Balpa, Brian Strutton, said the decision had come as a ‘bolt out of the blue,’ adding the union did not accept BA had a case for the proposed job losses.
He said: ‘BALPA is fighting to save every pilot job at BA. The company has declined Government support claiming it is financially secure enough to survive the coronavirus crisis so it is hard to see how these cuts can be justified.
‘There are many options to ensure BA can continue its business and survive coronavirus and BALPA does not accept that job losses are the only answer. Pilots want evidence that all options have been explored fully.’
News that thousands of people will lose their jobs comes weeks after the airline company’s Spanish owners axed a controversial £300million payout to shareholders earlier this month.
Madrid-based International Airlines Group proposed a dividend of around 17p per share in February, when the ravages of the killer virus on society and the global economy were already apparent.
But chief financial officer Stephen Gunning said the cash would instead be used to keep the company going through the virus crisis.
Other airline companies have felt the strain of internationally travel all but grounding to a halt during the global pandemic.
Flybe went into administration in March, while Sir Richard Brnason is reportedly looking for an investor for Virgin Atlantic.
He failed to secure a government bailout with his £80 million private island as collateral, reports indicate
Low cost airline Wizz Air will resume flights from Luton airport to Spain, Portugal and other destinations tomorrow – even though some are to countries that won’t let foreigners in
By Darren Boyle for MailOnline
Hungarian low-cost airline Wizz Air said it will be resuming flights from London Luton tomorrow.
The flights will service airports in Spain, Portugal, Israel, Slovakia, Serbia, Romania and Hungary.
The airline is promising low fares to stimulate demand, however, the Foreign and Commonwealth Office still advises against all foreign non-essential travel.
Passengers won’t be able to get refunds if they wish to cancel their flight, even if they know they won’t be let into the country they are flying to.
Hungarian low-cost carrier Wizz Air said it will resume flights from London Luton airport tomorrow morning after implementing new Covid-19 guidelines for staff and passengers
The airline’s chief executive Jozsef Varadi, pictured, said he hoped to have 70 per cent of services back between July and August
The airline is planning to resume services to locations such as Tenerife, Lisbon, Slovakia, Serbia, Bulgaria, Hungary, Romania and Israel
According to research produced by Bank of America, Wizz Air is currently sitting on massive cash reserves and could refund all passengers three times over.
Passengers on the resumed services will also be obliged to wear face masks and in-flight magazines will not be available.
Wizz Air’s UK managing director Owain Jones said: ‘As we restart selected Luton flights to provide an essential service to passengers who need to travel, our primary concern is the health, safety and well-being of our customers and crew.
‘The protective measures that we are implementing will ensure the most sanitary conditions possible.
‘We encourage our customers to watch our new video on how to stay safe when travelling, as well as for more details on our new health and safety measures.’
The airline is also preparing to resume flights to Italy – including the Covid-19 hotspot of Milan,
According to the company’s chief executive Jozsef Varadi, the airline will run 10 per cent of its services during May and hopes to have 70 per cent of its jets in the air by August.
Mr Varadi told the Financial Times: ‘While today looks like a huge concern, a life changing moment, in a year or two nobody remembers.’
How airlines bend the rules
British Airways: The refund option has been removed from its website but the option to claim a voucher remains. The customer service line is frequently engaged or puts callers on hold for hours.
Customers are being encouraged to apply for a voucher equal to the value of their flight but must pay more if it ends up being more expensive.
BA says customers should call to rebook, refund or choose a voucher. Refunds can be requested up to 12 months after the original departure date.
EasyJet: The refund option was taken off the website, but reinstated after customer complaints.
The airline is trying to refund customers within 28 days, but admits it could take longer. A spokesman says: ‘We assure customers these entitlements will be available long after their cancelled flight was due to fly.’
Ryanair: Offered full reimbursement within 30 working days, then did a U-turn and is ‘highly recommending’ customers apply for a voucher instead. Says customers will be able to exchange vouchers for cash after a year.
A spokesman says: ‘Customers who choose a voucher but don’t redeem it within 12 months may still apply for and obtain a refund.
Customers who choose not to accept a free move or voucher will be refunded in due course, once this crisis is over.’
Virgin Atlantic: Credit notes are being issued but can be rejected in favour of a full refund, with claims processed within 90 days.
A spokesman says: ‘The credit [equal to the value of the cancelled flight] can be used to rebook on alternative dates, allowing for a destination and name change, for travel until May 31, 2022.
If the rebooked date is before November 30, 2020, we’ll waive any fare difference.’ Refunds will take longer than normal.
Tui: Customers can choose a refund or credit note but can only apply for their money back once their refund credit has been received — up to four weeks after the departure date.
A spokesman says requested refunds will take about four weeks.
Jet2 is offering cash refunds but with delays because of an ‘unprecedented’ number of calls.
He said: ‘Whatever crisis we look back on in history, one conclusion you can certainly make is peoples’ memories tend to be very short. While today looks like a huge concern, a life changing moment, in a year or two nobody remembers.’
A spokesperson for London Luton Airport told MailOnline: ‘The safety of our passengers and staff is our number one priority and we continue to rigorously implement all Government guidance.
‘This includes deep cleaning, the installation of sanitiser across the airport and floor markings to remind customers to maintain a safe distance, as well as segregating staff shift patterns where practical.
‘Air links for both passengers and freight have been recognised as a key service and the Government has asked airports to remain open where possible, to ensure these services are not interrupted.
‘The decision to operate individual flights is a matter for each airline and any passengers using these services will need to adhere to all restrictions imposed both in the UK and in the country of travel.’
However customers who have booked flights and holidays with various airlines are finding it incredibly difficult to secure cash refunds.
Tui, the UK’s biggest tour operator, has extended the suspension of its holidays for the next six weeks.
The company said all trips would be cancelled up to and including June 11, and warned customers wanting cash refunds that its call centres are ‘incredibly busy’.
It had previously suspended its operations up to May 14.
Tui also cancelled its Marella Cruises sailings up to the end of June, and postponed the launch of its river cruises until late November.
A total of nearly 900,000 people have had their holidays cancelled, a spokeswoman said.
The firm told affected customers that they will receive a refund credit for the full value of their holiday.
This can be used to book another trip taking place before the end of October 2021.
Package holiday customers will receive an additional credit worth up to 20 per cent of their booking.
Tui said customers who are ‘unable to accept’ a refund credit can apply for a cash refund, but warned that its call centre staff are ‘incredibly busy’ so waiting times are ‘considerably longer than usual’.
Simon Cooper, founder and chief executive of rival travel agency On The Beach, told the PA news agency last week that failing to pay cash refunds is ‘a bad idea for everyone concerned’ as struggling companies will be forced to ‘massively increase’ their prices for next year’s holidays to avoid bankruptcy.
UK laws state that full refunds should be given within 14 days for cancelled package holidays.
Consumer group Which? found that none of the UK’s 10 biggest holiday companies or 10 most popular airlines are offering full refunds within the legal timeframe, and some are refusing to provide refunds altogether.
Many travel firms are suffering huge financial losses due to the collapse in demand caused by the coronavirus pandemic.
The Foreign and Commonwealth Office has advised against all but essential international travel since March 17.
Rory Boland, editor of magazine Which? Travel, said Tui ‘must ensure it is making the refund process as straightforward as possible’.
He added: ‘The travel industry is under unprecedented strain, and the lack of action from the Government on measures to support operators to process refunds is unacceptable.’
How coronavirus has affected airlines in the UK over the past month
Flybe: Europe’s largest regional airline collapsed on March 5 after months on the brink, triggering 2,400 job losses and left around 15,000 passengers stranded across the UK and Europe. Flybe’s owners, a consortium including Virgin Atlantic, the Stobart Group and hedge fund firm Cyrus Capital, blamed coronavirus for hastening the ailing airline’s collapse. Flybe operated up to 50 UK routes, accounting for 40 per cent of all domestic flights, and was used by 9.5million passengers a year.
British Airways: The International Airlines Group, which also includes Iberia and Aer Lingus, said on March 16 that there would be a 75 per cent reduction in passenger capacity for two months, with boss Willie Walsh admitting there was ‘no guarantee that many European airlines would survive’.
easyJet: The airline with 9,000 UK-based staff including 4,000 cabin crew grounded its entire fleet of 344 planes on March 30. The Luton-based carrier said parking all of its planes ‘removes significant cost’ as the aviation industry struggles to cope with a collapse in demand.
Loganair: The Scottish regional airline said on March 30 that it expects to ask the Government for a bailout to cope with the impact of the pandemic. Loganair will go to the government despite being told by Finance Minister Rishi Sunak last week that airlines should exhaust all other options for funding, before asking for help.
Jet2: The budget holiday airline has suspended all of its flights departing from Britain until April 30. A number of Jet2 flights turned around mid-air last month while travelling to Spain when a lockdown was announced in the country.
Virgin Atlantic: The airline said on March 16 that it would have reduced its lights by 80 per cent by March 26, and this will go up to 85 per cent by April. It has also urged the Government to offer carriers emergency credit facilities worth up to £7.5billion.
Ryanair: More than 90 per cent of the Irish-based airline’s planes are now grounded, with the rest of the aircraft providing repatriation and rescue flights.