Maximise your Avios, air miles and hotel points

British Airways to make 12,000 staff redundant

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

British Airways has just announced a restructuring and redundancy program that could put 12,000 staff out of work.

If you thought that everything was going to return to normal once travel restrictions end, think again.

Whilst British Airways has already made use of the UK Government’s job retention scheme and furloughed 22,626 of 45,000 employees, it expects that recovery of passenger demand for air travel will take “several years”.  It is unlikely that the furlough programme will continue beyond the end of June.

This is the wording released to the Stock Exchange this afternoon:

British Airways redundancy consultation

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.

[…..]

Recovery to the level of passenger demand in 2019 is expected to take several years, necessitating Group-wide restructuring measures.

British Airways to make 12,000 staff redundant

Here are extracts from a letter sent to staff by British Airways CEO Alex Cruz:

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

The announcement coincided with the early release of IAG’s preliminary first quarter results. As you would expect given the current environment things are looking tough, although it is relatively pointless reading much into them.

The operating result before exceptional items was a loss of €535 million compared to a profit of €135 million last year. Exceptional items include fuel and foreign currency hedges which were ineffective and contributed a €1.3 billion charge to pre-tax profits.

What would a 25%-30% cut in staff numbers mean?

As the number of staff required to crew an aircraft are fixed, a 25%-30% cut in staff numbers – assuming an equal cut between office staff and crew – would mean a 25%-30% reduction in flights.

How this pans out remains to be seen.  British Airways would presumably leave either Gatwick or Heathrow Terminal 3 permanently, although it is unlikely that it could do both.

The current phasing out of the Boeing 747 fleet would free up some capacity, but there are outstanding orders to replace many of these.  Whether these can be cancelled or not is up for debate – you can be sure that Boeing and Airbus won’t be letting airlines off the hook easily.  There is, quite simply, no easy option to remove this much capacity from the fleet in a logical way.  It could even be that larger aircraft such as the A380 fleet and Boeing 747 fleets become more important – not less – if airlines are forced to leave substantial numbers of seats empty.  There are a lot of discussions to be had.

PS.  If you think this is extreme, it may be not enough.  SAS announced today that it is making almost 40% – 5,000 – of its employees redundant.

(Want to earn more Avios?  Click here to visit our home page for the latest articles on earning and spending your Avios points and click here to see how to earn more Avios from current offers and promotions.)

Comments (161)

  • Mikeact says:

    Hopefully, there will be an element of early retirements, volunteers, natural wasteage (horrible term) etc., but still very difficult for all. Makes me realise how lucky my wife and I are , and I wholeheartedly take back my niggle that my special meal was not loaded last time.

    • Richard M says:

      There’s an old adage: You can change the shape of something but not the size. The costs will get transferred from the BA payroll to elsewhere, be it the pension scheme or social security budget, which ultimately means higher taxes and/or government borrowing, increases in interest rates or loss of value through inflation.

  • J says:

    Sad news, it will be tough for a lot of people. Employment law and rights are poor in the UK by European standards, I hope BA offer more than the legal minimum. I can understand the need for redundancies though, such is the level of uncertainty that until there is a breakthrough treatment it’s hard for individuals to plan, let alone companies.

    • Chris K says:

      In what way are they (we) poor in that regard? And that’s not a snarky question, I’m just wondering because I know we offer far more parental leave than most EU countries and we have a much higher minimum wage than most. Are we lacking in terms of redundancy? If so, how do we compare to EU countries?

      • Cam says:

        All far better than the US.

        • J says:

          Better than China too.

        • Lady London says:

          For poorly paid occupations in the US this is undoubtedly true.
          For higher paid occupations IMO the US treats people that have to go a lot better. Even if they are on “at will”contracts.

      • J says:

        It’s easy and cheap to make people redundant in the UK. Countless examples of a more productive site in the UK being closed and a less productive site elsewhere in Europe staying open. In the UK you’re not even entitled to any redundancy pay if you have less than 2 years service (given the high staff turnover this will include a lot of BA mixed Fleet crew). If you are unlucky enough to be made redundant in the UK, redundancy pay is also lower. And if someone in France, Germany or Denmark for example lose their job and need to claim unemployment benefit, how much they received is linked to their salary and paid as a % whereas in the UK it is a flat (and could mean going from a six figure salary to £74.35 a week, even less if you’re under 25).

        • will says:

          Personally I find it morally challenging that people are paid differing amounts to not go to work.

          • Dr Lee says:

            Do you find it morally challenging that people pay different amounts of tax when in work?

          • J says:

            High earners probably have in monetary terms greater financial commitments – it’s not about giving somebody 75% of their salary in benefits for life not to work as it is capped at 1 or 2 years and reducing over time depending where. It’s a soft landing to help someone made redundant get back on their feet and minimise hardship. So anyway, I hope any pilots made redundant get a decent deal from BA as Job seekers allowance in the UK won’t go very far.

        • Spaghetti Town says:

          At the same time you’d be complaining your taxes have gone up and the NHS needs more money. You can’t have it all. This countries debt is already absolutely massive.

        • Lady London says:

          Good summary @J
          in the UK it’s great for the owners of capital and entrepreneurs. Marvellous flexible low-tax economy for them.

          The cost of the UK’s amazing flexibility is borne by the workers. As soon as anything happens at any level they’re out of a job. Very few employers give decent permanent contracts to “workers” now. They are disposable. Workers are just slaves and will barely earn enough to live unless they get together in couples, familiies or unions..They will never earn enough to be free.You can do well in the UK but you have to get out of being a worker.

          Our pensioners and our single unemployed are really badly off compared to many other countries.
          I have no idea where the welfare budget is going -is it SO profitable for those with large families that it’s still better than working? So-called housing allowances certainly don’t go anywhere near the cost of rent for singles or couples in London.What on earth is the welfare budget being spent on?

          I am not (yet) talking about the professional classes here.

          • Ian says:

            mainly pensions.

          • Ken says:

            Single people in their late 50’s and early 60’s who are in and out of low paid work will frequently be better off as soon as they hit pension age even under our paltry system.
            Universal credit making the whole process even worse.

          • Spursdebs says:

            Love the way pensions aren’t now being called a benefit to suit a certain narrative.

          • Lady London says:

            @Ian pensions are 25% of the welfare budget.
            Where on earth is the rest going?

          • Lady London says:

            Not what I saw 2 days ago @J. Thanks.

            Given UK state pension is regularly stated by the likes of UN agencies to be close to the lowest level in the Western world then I still want to know : if it’s that low then where is all the money going? We don’t pay so much less tax than others, how do we explain the poor public services and miserable pension payments? Where is all the money going?

            @Anna I hate the day this bit is it anything to do with enormous unfunded public sector pension promises? Perhaps you are getting out at the right time..

      • J says:

        @Chris K: Where did you read that? My understanding is that we are one of the worst parental leave payers in Europe. https://blogs.lse.ac.uk/europpblog/2019/09/16/how-family-friendly-are-european-countries/

    • Anna says:

      I’m not sure it’s the legislation that’s particularly lacking as industrial rights are enshrined in the ECHR, rather that our trade unions have nothing lack the power and influence of their (for example) French counterparts.

      • J says:

        The ECHR has nothing to do with employment rights regarding redundancy. There are EU laws around employment (although the UK opted out of some

    • Novice says:

      Well the world is changing. You can imagine my shock when my martial arts sensei decided to start conducting my private classes over zoom and is now so in love with zoom that is planning to remotely teach me in the future as well😂🙄.

      I had to put my foot down and tell sensei ‘no chance’

      • Novice says:

        So I am imagining a world of zoom so my point is maybe business travel won’t be as regular in future. You might have an initial client meeting in person but future meetings via zoom. So airlines will need to adapt.

        • Rob says:

          My son is doing his piano lessons via Zoom and it’s going well. However, my daughter trying to learn cricket in her bedroom the same way is not going well ….

          • Novice says:

            😂 I can understand that as I play piano and it’s not exactly hands on teaching but in any sport you need the right surroundings to actually get motivated. My sensei has said my fitness drills (situps, press ups, planks etc) are awful. Apparently I don’t try my best in my garden or living room 😂🙄

          • Delbert says:

            I’m glad you’re doing a lot of plank work, Novice. That was my initial assumption.

          • Novice says:

            No need to be envious and bitter about any individual’s situation.

            Be positive in life. You should be grateful. Some have lost loved ones and also their own lives in this epidemic. You are commenting so you can’t be a ghost so be grateful to have your health and life.

        • J says:

          I think people may also forgot quickly. In most sectors sales and relationships is always going to be better done in person. A zoom meeting can never convey the same amount of emotions and it’s not possible to build the same level of rapport, so I think you’re right initial meetings might still be face to face – but as things improve, people forget that’ll extend to “important” meetings. Of course all of this will vary a lot between different industries.

          • Novice says:

            True. I meant really where business people turn up in various countries for presentations etc. I imagine these things will be via zoom because by the time we get back outside of lockdowns, most people will have seen what advantages tech can give. And I don’t think companies will be happy to cough up extortionate amounts on business travel on a regular basis. It’ll be rarely rather than regularly.

            That’s why I gave my class example before this situation my sensei who is very zen was all about the inner peace and didn’t get into tech stuff.

            Now it’s the other way around. I’m itching for a proper class and sensei is happy in remote world.

          • Sarah says:

            Whilst you might be able to conduct a conference session fairly well over Zoom, you’re not going to be able to network and develop your sales leads in the same way as you would during breaks and dinners so conference business travel is going to need to come back at some point.

  • Super Secret Stuff says:

    I’m still waiting for the aircraft retirements. I think the 747s will go and be replaced by existing orders.

    IAG are likely to do a group wide order to replace a319s and a320and the odd random small fleet here and their. So could see a large chunk of those retired and replaced as demand ramps up

    • JJ says:

      So far two 747s have gone to Kemble for storage. They are unlikely to be recalled so may well have flown for the last time.

  • pauldb says:

    The focus on BA does make me wonder if this has some politics in it. How many of the 12,000 might be saved if Virgin isn’t bailed out: how different will future BA be if it has monopolies on several of the best remaining routes?

  • The Savage Squirrel says:

    “It is unlikely that the furlough programme will continue beyond the end of June.” I wouldn’t be too sure about that…

  • Ken says:

    I’m not sure the furlough scheme was intended to be used for the 45 days consultation and up to 12 weeks notice period, but just very difficult to see long haul getting back to normal within the next 2 years.

  • Keith says:

    Furlough has been a god-send to people like me on a Zero Hour Contract. If it hadn’t been introduced my employer could have just said ‘no more shifts’ and that would be that.

    If furlough ends and I do loose my job (reasonably likely as I work in theatre). There’ll be no redundancy payment as it’s Zero Hour, even though I’ve worked consistently for the same employer for 12 years.

    Have picked up a few nights a week at Sainsbury’s. Feel for the BA staff, it’s rotten loosing your job, especially when you love it and especially when there will be fewer opportunities out there.

    Thankful for health. Can’t wait till this is all over.

    • Alex Sm says:

      Lots of unfairness out there… My partner lost two of his zero-contract jobs overnight. No compensation. He doesn’t qualify for self-employment benefit (and it ill only start in June anyway), nor does he for UC as apparently I earn TOO MUCH (I wish…). So cross

      • J says:

        Sorry to hear this, lucky he has a partner who can support him at least. Hope things improve for him soon.

      • Anuj says:

        I hope after this people realise how different the reality of our benefits system is to the tabloid spin. Yes some people abuse them but the vast majority don’t, and that’s not a valid reason to make the system so bad it doesn’t support those we need the help.

        • Paul74 says:

          +1

        • Novice says:

          Most people abusing them are actually abusing the world as they have a lot of kids which is really bad for the world 🌎

          Tbh, I know it might sound cruel and I apologise if someone has lost someone in this pandemic but this virus hasn’t even killed enough ppl to wipe out the millions of births per day. In the grand scheme of things, this virus is not a big deal as climate change will cause untold suffering and deaths.

        • Lady London says:

          Well said Anuj. The alacrity with which the government has relaxed some really nasty unfair restrictions just for coronavirus means they know all along they were bl**dy unreasonable.

          Though I really don’t know how to solve the problem of permanent claimants who don’t want to work and other abusers. But for most of us who pay in for years thinking there is a safety net, the reality of denial and abuse by the DWP in normal times comes as a literal shock to the system.

  • ChrisBCN says:

    I know I’m going against the prevailing school of thought here, but I still believe that air travel will be back at around 2019 levels in 12-18 months from now.

    It does make sense for airlines to reduce staff now though, and hire when they see volumes start to return. Saying they won’t recover until later is good for managing market expectations etc, and looking better when traffic does return sooner. (And I mean no insensitivity towards those who are unfortunate enough to lose their jobs in this or any other industry).

    • Novice says:

      You might actually be right. It’s unpredictable but I can imagine a lot of people might become more reckless depending on their personal situations and decide life is too short, best get all the bucket list done asap. But then again you might get some ppl who were reckless before turning into cautious stress-heads who decide they have to wait for a few years before they start careless globe trotting again.

    • al says:

      there’s going to be a lot less work trips