Iberia and Vueling are bailed out by the Spanish Government

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• ROB SINCLAIR says:

  1 May1 May 19:12

  Well Vueling can now pay for COVID-19 cancellation flights !!

• JohnT says:

  1 May1 May 19:53

  Here’s a fun thought, should you move your Avios to Iberia away from BA? Are they any safer there?

  • ChrisBCN says:

    1 May1 May 22:47

    It’s an interesting idea and one I considered myself (I have avios in BA, Iberia and Vueling accounts). I decided that none of them are at risk so didn’t make the effort to move any. If I had to pick the one mostly likely to survive (although I’m highly confident all will) I would choose Iberia over the others.

• GaryC says:

  1 May1 May 20:29

  The job losses are very sad indeed. I love flying BA, have had almost universally positive experience with their crew, and amassed 6000 tier points in my last membership year, 80% of it through leisure flying. But sound management of the business, and doing the right thing for the country as a whole and our taxpayers, often doesn’t go hand in hand with many of the rose tinted emotions. Sadly here, I think BA are doing the right thing for the continued existence and health of the firm. They’ve taken a multi-year view of the industry and likely flying habits, and acted decisively.

  I appreciate that planes flying the Union Flag colours and good positive personal interactions do trigger strong emotions. But look at things another way – would you be happy if your taxpayers money and your children’s money was being spent now (or future earnings spent in advance) on perhaps slightly more obviously ways of zero value add to the economy? How would you feel, for example, if your money was being used to pay for people to build cars which were immediately crushed after the they came off the production line, because there was no market for them? That in essence is what other nations are doing, and whilst support over short periods of time is ok, over a multi-year horizon which is what we are dealing with here, it’s not. You need to react decisively which is what BA have done.

  • marcw says:

    1 May1 May 20:58

    Also… look at the other way round. How unfair is it from a Mixed Fleed POV that on the other plane, the exactly the same job is rewarded way more. Have Euro and World fleet ever shown compassion towards Mixed Fleet crew?

    • marcw says:

      1 May1 May 23:30

      I already have to fight for every penny. EVERY PENNY. That´s what you do when you do basic research.

  • Derek Scott says:

    1 May1 May 21:11

    Finally an alternative and, IMO, objective view!
    I find it interesting that people cry out BA morale being the pits, yet using Glassdoor Ratings, it sits with a reasonable 3.4. Other Sector leaders such as Lloyd’s Banking Group and BT plc are at a comparable3.5 and 3.6… yet we don’t hear of staff morale problems with them, and both have also had significant restructures and headcount reductions in the past few years.

    Whilst any job losses are difficult, the decision makers have to live by their strategy and suffer the consequences. Personally, as a loyal BA customer, I’ll watch with interest, but as I can’t influence the decisions the Board want to make.. I’ll respectfully leave them to run the business as they see fit

• Will says:

  1 May1 May 22:28

  In the alternative BA showing prudence and not just borrowing money to burn in salaries and lease payments.

  Very little point in putting your company into an unsustainable debt position in the medium – long term even if it’s the government that will cover the bad debt if they go bust.

  • Mr(s) Entitled says:

    2 May2 May 06:34

    BA would be derelict in their duty not accessing this money. It will not increase net debt if used to refinance debt already on the books at a higher rate. And judging by what Wizz got, I suspect all of BA’s debt is at a higher rate. Conversely therefore, taking as much of this money as they can now would probably save them money assuming they can match durations.

• insider says:

  2 May2 May 00:21

  I’m am 95% certain BA will be accessing the UK government loan scheme. They would be stupid not to, i guess they must just be sorting out the terms. I bet you that by results next Thursday they will have something in place. Again, it’s not a bailout in the form Lufthansa or Air France are looking to get, it’s the same as Rob taking his £50k with no plans to actually use it – why not.

• Matt says:

  2 May2 May 02:53

  BA have been waiting for ages for a reason to get rid of their cost heavy legacy staff…

• Sonic says:

  2 May2 May 04:16

  This is just a cynical attempt by BA to use a bad situation to remove staff on the legacy terms and conditions. They will rehire just as many in six months on the new lesser terms. So much for loyalty. The savings on pay t and c and pension costs will be huge.

  • Ruh says:

    2 May2 May 06:42

    Can’t they just pay pilots minimum wage – take it or lump it?

    • Ricardo says:

      2 May2 May 09:13

      As a responsible employer BA would pay the living wage.

    • Lady London says:

      2 May2 May 11:34

      They could, now. Given complete collapse in demand for pilots.

      However pilots would normally have earned enough to save some money so they would close to all walk away.

      Up to and beyond the median salary level in the UK employees generally haven’t savings especially if they’re single or even couples. Note I said median (half way through sample size) not average.

      So the vast majority of employees in this situation have nothing to fall back on and because the UK is run for the owners of capital, those employees have nothing, get nothing for losing their jobs and can’t walk away.

      Some former employees of British Airways will literally die because of this.

      • anand says:

        2 May2 May 16:18

        complete speculation stated as fact.

    • Dave says:

      2 May2 May 13:23

      Wow. Stunning ignorance.

      One of the reasons pilots are paid more than the average wage is because it’s a skilled job and there are significant personal sacrifices to be made (the responsibility of 300 lives and a two hundred million pound aircraft, overnight flights, crap weather, birthdays / Christmas / anniversaries etc away from families, loss of sleep health impact, and the stress of putting their livelihood on the line every six months). The job is undeniably rewarding but not so much that people will do it for minimum wage.

      If they could earn the same money packing boxes at Amazon then do you genuinely think they’d keep flying? No, what would happen is the most desperate person will get the job. I bet you wouldn’t be so keen to be a passenger during storm Dennis knowing that the pilot is at work because he or she is desperate for enough money to keep their house or family. Probably with a cold as well, because the absence policies are going to become incredibly punitive.

  • BJ says:

    2 May2 May 07:25

    I doubt BA will even be at 50% of its November 2019 capacity in 6 months so the prospects for rehiring in the short term of anybody made redundant are slim. I feel very strongly that BA are currently using the job retention scheme and our tax payer money to push this through at minimum disruption and cost to themselves, and will very likely return with further requests for tax payer support when their dirty work is all done. I plan on contacting my MP regarding this matter tomorrow, I hope others will do the same.

    • GaryC says:

      2 May2 May 08:04

      So they put staff on government furlough at the start of April when demand collapsed (with massive approval from the unions at the time), and then a month later when projections of the recovery in demand suggest its going to be extremely protracted at best, they right size their business.

      And in terms of doing it at minimum cost, how is that wrong in these circumstances? The directors have a responsibility to maximise the survival chances and health of the business.

      Put another way, consider your personal reaction if you suddenly lost your entire income stream, and your best projection suggested you wouldn’t get it back for 18 months, yet your current lifestyle spend meant you’d burn through your cash in 6. I suggest you’d quickly stop shopping at Prada, if the alternative was being on the streets.

      • Paul says:

        2 May2 May 08:14

        Exactly, even if the government said do you want a loan that you will need to repay to keep shopping (and you’ve no use for the clothes for a while)

        I do feel very sad for the staff. Going to be a tough few years for the economy

        • AJA says:

          2 May2 May 09:45

          @Bob, are you on a legacy contract? I’m guessing so from your 24 years service. Would you prefer to move to the Mixed Fleet contract if it was a case of remaining employed or being made redundant on statutory terms?

          I understand the frustration especially as it seems that BA has so much cash but that cash won’t last forever in the same way as your £600 won’t. The difference being the sums are bigger but so are the expenses. If the cash runs out then no one at BA has a job, not just the potential 12,000. I accept that the cash may not run out but just borrowing from the government isn’t necessarily the answer either.

          I wish you and all your colleagues well.

        • Lady London says:

          2 May2 May 11:26

          @AJA of course employees would move to Mixed Fleet sooner than take basically nothing in exchange for losing their jobs. Then anyone with any sense would take anything else as soon as they can after that if they’ve been forced by BA into losing all their legacy benefits. Unless long service still has a value.

          But UK legislation is miserablly nonprotective of employees and if an employee is going to play hardball then even the meager amount you could get stops at the point of 12 years service.

        • Lady London says:

          2 May2 May 11:43

          Yes, let excess staff go, Mikeact. But be decent about it because this is a blip in the continuing life of BA, but is permanent damage for employees.

          And find a fair basis for selection. I haven’t had amazingly motivated and competent service from Mixed Fleet most of the time whereas with legacy staff I can remember only quality experiences going back at least 20 years.

          I’d try a challenge as to basis of selection for redundancy as being indirectly discriminatory which is illegal. I think BA could find enough reasons right now to make it stick anyway but worth a try

        • Lady London says:

          2 May2 May 11:46

          The Spanish government had the b*lls to demand this and so will the French and Dutch. The UK? why do we stay working in this stinking ship?

        • BJ says:

          2 May2 May 13:14

          @Lady London, we stick with it because the populace in the UK, unlike the French for example, no longer have the b*lls for a fight. There are two reasons for this. Firstly, Mrs T turned us into a ‘home-owning’ nation with mortgages so we could no longer afford to fight. I’ll give her her dues, she was a smart cookie who knew exactly what she was doing with that and it was nothing to do with peoples personal aspirations and home-owning dreams. Secondly, the populace has been fed a diet of whoppers with relish on top by the right wing media so widely and for so long that at least half the country have now swallowed it hook, line and sinker. If you repeat it often enough people will believe it.

        • Ken says:

          2 May2 May 17:58

          Simon,

          The Times estimate of BA ‘burn rate’ is simplistic to say the least. That roughly is what they spend a week in normal times. However half of that is employee costs and fuel. If they ain’t flying they aren’t buying fuel and until July a big slug of the employee costs are covered. Then there are operational handling costs and catering that are vastly reduced.
          BA need to reduce headcount & fleet size as we aren’t getting back to normal in a hurry and they need to take action now, but the idea they will run out of cash in 12 weeks is a little fanciful.

      • Bob The Builder says:

        2 May2 May 08:50

        Hi
        Gary C ,
        So you think due too the current climate and a Pandemic going on its ok too sack all your loyal long serving staff that has help you make the billions of profit over the years?

        Not sure if you are aware they have over €6 billion in cash I have currently £600 and been in this company for 24 years?

        They are using this as a excuse to change the company’s outgoings to suit there greedy pockets Gary ,have you never herd of the word immoral ? Look it up that’s what this and how this will benefit the government as we are uk tax payers and the uk economy?

        Lastly I am not sure your aware but not many jobs out there at the moment Gary I just hope that you employer looks at this and then does the same too you! But by the sounds of it your probably the owner of your business and best mates with Walsh & Cruz for your free first class seat? Mmmm thought as much!
        As for demanding by a trade union for furlough it was not a demand it was our legal rite to ask to be furloughed as by the uk government Gary we have all payed into the system! So why should we not be payed during this crisis? Income stream imagine well i am and I have never afforded to shop at Prada Gary and I may have to have food parcels going forward but job seekers allowance won’t even cover my council tax so as your so clever how will 25000 former employees be able to live and pay bills Gary? Hopefully the government put your tax up by 50% just you no one else who is a uk tax payer so that I am able to claim more benefits going forwards.

        • Mikeact says:

          2 May2 May 09:15

          I understand your bitterness. So, try to explain to us what you would do if you were running BA, today and going forward in 2/3 years time.
          You may need a crystal ball, but give it a go. I for one would be very interested to know.

        • Chrisasaurus says:

          2 May2 May 09:16

          Sorta lost us a bit there Bob…

        • Doug M says:

          2 May2 May 09:36

          I’m with Bob. BA making plenty of money up to now. IAG is scandalous. Iberia and Vueling take cash to maintain staff, while the BA uses the situation to dump staff on better contracts. I’d like to see IAG ended as a result of this. Either it’s a group or it’s not. BA contributed plenty to it’s profits and survival, yet now it’s staff takes all the downside.

        • Simon says:

          2 May2 May 09:44

          I had a quick look on Companies House and in their last set of published accounts BA showed £1.327 billion in cash plus £1.175 billion in interest bearing deposits (not 6 billion). For quick reference the balance sheet is on page 26 and the related notes (21) to the accounts on page 57. With the vast majority of fleet grounded it won’t take long to ‘burn’ it. The Times estimates BA are burning about £200m a week so at this rate they have reserves to see themselves through about 12.5 weeks.

          I really do feel for BA employees but to survive under current circumstances I don’t believe BA have an alternative option to downsizing their operations.

        • Mikeact says:

          2 May2 May 09:55

          @Doug M. It’s good that we can all have a view and debate the BA issues, as long as it doesn’t get personal I feel.
          I’d be interested to hear your views on the related question I asked Bob above…thanks.

        • marcw says:

          2 May2 May 10:20

          There’s a conflict of interest here.

        • BJ says:

          2 May2 May 10:23

          @Mikeact, it’s despair I’m ‘hearing’ in Bob’s comment and that’s a whole different level from bitterness. If Bob is a BA employee, you can magnify that despair up to 40,000 times, and then probably scale that up at least ×10 when considering the staff and other businesses (big and small) that are dependent on BA. I don’t dispute the need for BA, like the rest of the industry, to make adjustments but they do have choices in the way they go about it.

        • Mikeact says:

          2 May2 May 10:28

          Thanks for that, but I guess, as just a customer, I’m not sure I know what their choices are as you say…which is what I’m trying to get my head around ?
          From what I understand they have enough money for around 12 weeks or so and then that’s it ?

        • Doug M says:

          2 May2 May 10:34

          @Mikeact. How about you answer why Iberia and Vueling can take gov money to protect jobs but BA can’t? Regardless of how I or others might manage BA the only thing that matters is how it is being managed. IAG as a group is operating on one level in Spain protecting jobs and employees, and on another in the UK, acting like a scum employer using a major health crisis to dump its higher earners and those on better terms. Why can’t it use deferrals so that in better times the pay and conditions are brought back to previous levels.

        • Simon says:

          2 May2 May 10:48

          If BA took out a £1 billion loan it would be able to tread water for an extra 5 weeks. Sorry to have to say this but it would just delay the inevitable. The Directors have a fiduciary duty to do the right thing for the business and taking out a loan like this if they can avoid it would be seen as the right course of action.

        • marcw says:

          2 May2 May 10:56

          @Doug, from the IAG spectra, LEVEL and Vueling are the “chepest” employers. Followed by Iberia. Remember IB used the 2008 financial crisis to layoff `000s of jobs and cut wages across the board. They even created IB Express as a bargaining tool, until eventually the Gov had to intervene in IB-Unions negotiations.

        • Lady London says:

          2 May2 May 11:20

          Very,very well said @Doug M.

          @Bob BA would have to downsize anyway. Theyve decided FiFO method of selection. We know why. Can you challenge this method of selection or say that it indirectly discriminates selection by age to make it illegal? Many, many companies would do LIFO.

          BA has to let quite a lot of people go whatever they do. My issue is their true motive in choosing to use it to dump legacy decent contracts of longserving loyal staff. But secondarily they are not using money that is available to make this more decent than the legal minimum for the staff who will have to go. They are in a position to do this even in current circumstances which will have an end.

          It’s the indecency of this when we know BA will survive. Turfing out longserving employees into the cold when there is nothing for them, when BA has access to resources to make that more decent and BA will survive and can recover but employees might not, this is disgusting.

          More worrying is, why would anyone possibly stay employed in the UK long-term when the government is protecting UK employees less than, particularly, the Spanish.

        • Lady London says:

          2 May2 May 11:51

          @Simon fiduciary duty we all understand the numbers of staff that will have to lose their jobs.

          But regardless of fiduciary duty there is the need for humanity and whatever kindness can be offered.

          Otherwise if you’re blocking my way on the road I have every right to shoot you because I’m stronger than you and no need for me to politely ask you to move out of my way.

        • GaryC says:

          2 May2 May 23:49

          Bob – I understand the hurt and anguish at the current time. To address some of your points, whilst I’m probably successful in my field, I’m not a big business owner, nor do I move in the circles of people like Cruz. Regardless of what you might think, the position I take after a lot of consideration is one that I think will genuinely do the most good (or do the minimum harm) – and that includes balancing the needs of staff, shareholders and taxpayers. In the current environment it’s simply the lesser evil – there are no good options. Undoubtedly it will mean a bad outcome for some, and I’m sorry if you are one of the people affected. I will quite happily pay more tax when (inevitably) required to do my small part of help the country through this. And as soon as I’m able to fly again, I’ll be at T5 in my N95 mask and with my anti-viral wipes helping put some money back into BA’s coffers.

        • Simon says:

          2 May2 May 23:57

          @Lady London. Completely agree with you. It has to be done as humanely and friendly as possible. The HR Director/Manager and their team at BA have everything to lose if they get it wrong.

          A few years ago my wife contracted an auto-immune disease which ended up in the closure of her business as my businesses were already a crazy working week. We used an amazing HR consultant (we’ve used for over 10 years) and she was a star on the humanity and kindness side. Between her and us we’d arranged new employers for all of the staff in that business. Obviously this is nigh impossible for BA but they need to do it with compassion and humanity in mind.

      • BJ says:

        2 May2 May 09:34

        Because they should prepare better so that they can survive a 100-year storm event, not just your average monsoon season.

        • Ralph says:

          2 May2 May 10:13

          BA is/was far better prepared than other competitors, but even with the cash and resources they have they cannot conceivably afford to keep everyone one while there is virtually no revenue coming in and little prospect of travel recovering to 2019 levels for several years. LH and AF/KLM entered this in a much weaker position and the US airlines had essentially no cash as it has all been spent on share buybacks in recent years.

          It is obviously terrible for the staff but the directors also have strict legal duties to the shareholders to manage the business. They would be sued if they just kept staff on indefinitely with no work or insufficient work and staff make up a huge proportion of their costs.

          BA is obviously a business that creates headlines, but no business that loses 90% of its turnover overnight through no fault of its own and has no visibility as to when that revenue might return to even 50% of previous levels can simply do nothing. It would also be totally contrary to the interests of the 2/3 of staff who will remain. In these situations the most expensive staff in terms of salaries, perks etc. (ie total employment costs) are always going to be the most vulnerable. One expensive departure may save two other jobs.

        • RussellH says:

          2 May2 May 10:25

          > the directors also have strict legal duties to the shareholders to
          > manage the business.

          It really is about time that company law in this country was amended so that both employees and customers were also owed equivalent strict legal duties.

        • BJ says:

          2 May2 May 10:48

          Not much point evaluating the relative merits of wonky carrots and bog-standard carrots when what was needed was Chantenay.

        • Lady London says:

          2 May2 May 13:29

          @Ralph “one expensive member of staff may save 2 other jobs”.

          How about the literally hundreds of jobs that could be saved if the fatcat management packages got trimmed permanently too.

          No one’s denying here about 12000 staff have a case to be let go. It’s which staff are being chosen and the fact that BA could make this more decent for those employees than they can get away with. Its a one off cost for BA to have some decency but for the employees it’s permanent.

        • Ralph says:

          2 May2 May 15:40

          @ Lady London – this idea of ‘fat cat’ management salaries at BA/IAG is just emotional twaddle. They have an incredibly lean management structure that has been slimmed down greatly over many years. The office based staff have taken a lot of the pain. I have nothing to do with IAG or any airline but I do look at these companies very closely.

          Unfortunately, it is just the same principle as when people expect the rich to shoulder all the extra tax burden. They should, but the reality is that in this country only c. 10% of people pay higher rate tax (ie earn over c. £37,500 after personal allowance, so c. £50k) so that in order to raise meaningful sums, the tax burden will always fall on the majority. Increasing higher rate tax by say 20 percentage points raises remarkably little money – about the same as 2p on the basic rate. At BA, the vast majority of staff are pilots (relatively well paid, but a very highly skilled job with expensive and long training) or other customer facing staff who are much less well paid, but very numerous. Regrettably, they will have to take the pain.

• Graham Coombes says:

  2 May2 May 08:41

  Am I right in believing BA still separate non transferable crews at each airport as well?

  • AJA says:

    2 May2 May 09:36

    I think that is the case which means if BA really does not return to LGW I think all staff who are based there are for the chop even if they transferred the flights to LHR.

    • Lady London says:

      2 May2 May 11:57

      Yes. The employer only has an obligation to consider offering a redundant employee a move to another site if that site is within IIRC 15 miles or so of the employee’s current site. So if Heathrow was that close to Gatwick an employee could claim any relevant job there. Unfortunately though, in n this case both sites have no no jobs vacant.

      • AJA says:

        2 May2 May 15:43

        Lady London I was actually referring to the possibility that WW (Worldwide) or EF (Eurofleet) crew at LHR would assert their right to take the job on a flight now operating out of LHR that was previously operated from LGW by MF (Mixed Fleet) crew. This makes it difficult to make WW or EF crews at LHR redundant and then move LGW MF crew up to LHR. With redundancy you make the role redundant. I think this is more complicated than simply making the 12,000 cuts from as many WW or EF crew as possible. But I do also think they will try to make WW and EF crew move to the MF contract. It’s not a good time to be working for BA and I feel sorry for all affected.

      • Ken says:

        2 May2 May 18:03

        One thing that is inevitable is that there will be the odd leaked e-mail from senior management that says something along the lines of “ use this as a great opportunity to get rid of older legacy staff”, which will be ideal evidence in the slew of unfair dismissal cases for age discrimination.

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