There’s No Flying Without Staff: British Airways slashes 12,000 jobs as its future remains uncertain
May 22, 2020
2 min read
What's going on here?
British Airways (BA) prepares for a second round of staff cuts, raising questions about the certainty of its future.
What does this mean?
British Airways’ plans to cut 12,000 jobs as a response to the coronavirus outbreak. This number is close to 30% of its total workforce. The decision is in line with measures suggested by Willie Walsh, the head of the International Airlines Group (BA’s parent company).
This move has been criticised by labour unions. It seems that BA’s plan for profit post-corona is going to be delivered at the expense of its employees. Job cuts will not be the only measure adopted by the airline. Many employees will be forced onto the inferior contracts offered to new entrants since Walsh’s takeover in 2010.
The company has also warned its staff at Gatwick and London City airports that it is uncertain whether they will resume their operations from the two hubs.
What's the big picture effect?
This story is a good illustration of the state of the aviation industry. The threat to jobs is only a symptom of the much larger crisis the aviation industry has been faced with. Past shocks, like 9/11 and the 2002 Sars outbreak have not caused irreparable harm to the industry. This time around the crisis has hit deeper. The International Air Transport Association has warned that revenues will be 55% lower compared with 2019. They predicted a loss of around 25m jobs.
Some European countries have offered support for their flag carriers. Air France and KLM secured a shared €10bn package, and Germany has pledged to support Lufthansa. British Airways’ parent company, IAG, is infamously against government bailouts. This can be seen as a strategic move by Walsh. He hopes to increase BA’s market share once travellers resume their journeys. He hopes to put its competitors (particularly Virgin Airways) at a deadly disadvantage. Unlike BA, Virgin lacks the funds available to sustain itself in the long run, after it generated only £83m in net cash from operations in 2019.
More importantly, the aviation industry was struggling even before the virus spread. A majority of airlines are not actually profitable. Only a handful of Europe’s carriers have a positive turnover. The future of the aviation industry is looking bleaker with the added fear after the recent collapse of other airlines, such as Thomas Cook and Flybe. The airline industry was never the most stable. It’s usually the first to suffer from natural disasters, terrorism, and political uncertainty. This pandemic is just another chapter of aviation pain.
While the Coronavirus pandemic has caused undeniable harm to the aviation industry, its struggles did not start with the lockdown. To read more about the airline’s struggle for survival, check out our report on it here.
Report written by Andreea Dicu
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