British Airways to cut 25% jobs, expects competitors bankruptcies

The air transport industry is now suffering significant losses stemming from the epidemic-related travel restrictions, and the effects of it haven’t been long in coming. As all airlines are now desperately looking for effective ways of cost reduction, one more European carrier plans to cut up the workforce.

After the announcement on April 2, 2020, about the furlough of 30,000 workers (all of them retaining 80% of wages), British Airways (BA) now reveals its intentions to dispense with services of a quarter of its employees. 

The International Airlines Group (IAG) (IAG), the controlling company of British Airways, indicated in a statement on April 28, 2020, that although the matter will remain subject to consultation, there is still a high probability it will eventually result in the redundancy of 12,000 BA workers of its 42,000 staff.

Echoing recent estimations of other airlines, IAG presumes that regaining passenger levels of 2019 will be a lengthy process that will likely take several years. Based on preliminary results, IAG expects operating losses in the second quarter to drop in comparison with the first quarter, instigated by further passenger traffic decline.

"We must overcome this crisis ourselves, too,” explains British Airways’ Chief Executive Alex Cruz in his letter to employees. “There is no government bailout standing by for BA and we cannot expect the taxpayer to offset salaries indefinitely... We will see some airlines go out of business."

SAS, Scandinavian Airlines, made a similar statement, saying it had already initiated layoffs of its workforce, amounting to 5,000 employees. 

Earlier this month, IAG grounded about 90% of the British Airways fleet for the spring period and canceled its proposed 2019 final dividend, worth €337m, because of the pandemic.