IAG takes UK Government funds, after British Airways said it wouldn’t as an excuse for job cuts

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• Rhys says:

  7 May7 May 15:14

  If you want to make substantiated criticisms be our guest, but making facetious comments and generally spamming will get deleted for obvious reasons 🙂

• SilverInSix says:

  7 May7 May 15:39

  I think both HM Gov and us as taxpayers should be told where that money is actually being spent.

  I would not find it acceptable for even a, comparitely, small loan taken out by IAG to be used to prop up Iberia especially when BA is making massive job cuts and Iberia is not.
  ( If I’ve missed a 1/4 job slashing at IB then I stand ready to be corrected on that part)
  Any UK Taxpayer money needs to be spent on BA alone as far as I’m concerned as all other airlines are domiciled in other nations so it’s, imho, those governments and taxpayers that should be footing the bill even on a temporary basis.

  • ChrisBCN says:

    7 May7 May 15:55

    It’s acceptable for a UK government loan to be given to non-UK companies with a decent sized employee base in the UK as has happened here. I don’t know why you wouldn’t like that? And I’m sure you are aware how many ‘British’ companies are foreign owned…..

    Don’t forget that IAG runs IT and cargo functions (amongst other things) from the UK.

    You are right that Iberia hasn’t fired people, but I’m pretty sure that under Spanish furlough rules (ERTE) means they can’t, at least until furlough ends.

• Simon says:

  7 May7 May 16:03

  Interesting that everyone else sees accessing the BoE facility as worthy of a RNS announcement but IAG feel able to leave it under wraps for three weeks. Questionable whether a £300m cheap loan is price sensitive for IAG given their liquidity pile, so probably not an issue, but definitely out of line with market practice.

  • Save East Coast Rewards says:

    8 May8 May 00:22

    I wonder else who’s claimed the loan without making it public. There’s probably quite a few companies.

• Joan says:

  7 May7 May 16:50

  “It seems remarkable that British Airways cannot find anyone with sufficient responsibility to join others from the aviation sector for our Select Committee inquiry this Wednesday. With so many questions, this would be an ideal platform for BA to set out its challenges, to reassure and seek Parliamentary support should it need more assistance from the UK authorities.

  “In March, BA’s parent, IAG, warned against the UK Government bailing out its competitors and said it would administer ‘self-help’ before seeking support. BA’s UK staff are now facing mass redundancies or working on vastly reduced terms. BA’s passengers are not being given flight refunds they are entitled to.

  “In Spain, it would appear that BA’s parent has adopted a different strategy of seeking substantial Government financial support and maintaining its operations and employee numbers.

  “It’s vital that BA reassure their staff and passengers that they are not using this epidemic to reduce their UK wage bill and competitors, in order to maximise future profits if and when the market returns.

  “Judging by the huge volume of emails which MPs are receiving from concerned staff and passengers, it is more important that we hear from BA and IAG than demonstrate their lack of delegated responsibility. We therefore intend to proceed with a separate session for British Airways and Mr Walsh on Monday 11 May in the event the limited resources in Parliament can accommodate. We look forward to meeting Mr Walsh and hearing his strategy for BA in these challenging times.”

  • Rob says:

    7 May7 May 17:24

    They got Simon Calder to give evidence this week, unbelievably.

  • Trevor says:

    7 May7 May 17:37

    Walsh before the Committee on 11th, isn’t he?

    • Kruggs says:

      7 May7 May 23:41

      i doubt he will say much about job losses. The consultation has to be done in good faith, so he will use that line that he doesn’t want to prejudge any result, and hence he won’t be able to talk much about it, which is correct.

  • Lady London says:

    7 May7 May 18:19

    I hope they question strongly on basis for selection for redundancy and get assurances from BA that those whose contracts will be chosen to be terminated will not indirectly discriminate on the basis of age. By definition that should keep a substantial portion of legacy contracts untouched?

    • Mr(s) Entitled says:

      7 May7 May 22:22

      Genuine question, why would the promise not to discriminate on age save anyone? You can still let people of a certain age go without discrimination based on a whole host of metrics. Can’t you?

      • Lady London says:

        8 May8 May 19:55

        It’s illegal to use the usual criteria such as race, religion, age, gende orientation as a basis of selecting positions/staff for redundancy. Indirect discrimination (such as if your rules for selection don’t include those things, but the application if whatever selection rules does turn out to disproportionately mean people with above characteristics end up redundant, that is indirect discrimination and therefore that is unfair selection for redundancy.

        Given that anyone with a legacy contract is likely to be in an an older age group disproportionately compared to the spread of ages in the total workforce eligible to be selected for redundancy, I was thinking that this age effect would amount to unfair selection for redundancy (and therefore illegal) if it would miraculously turn out that staff on legacy contracts somehow end up disproportionately
        selected to be made redundant.

        Don’t get me wrong. I agree that some legacy staff still earn compensation that is now excessively high compared to compensation levels in the industry today. This cannot be sustained. However I believe all previous commitments should be honoured by the employer, any accrued benefits preserved, and generous notice given of changes (and an option of as decent a redundancy package as can be managed, provided for all staff whose roles are no longer needed in existing numbers or where the role exists but compensation needs to be brought in line with the industry.

        I know that threatening only statutory compensation for redundancy was probably just an opening ‘softening up’ tactic by BA. However we all know that even in these sure industry circumstances BA still has the resources available to be more decent than that to employees. Some redundant employees will never work again but BA will come through this and have long term strength. So BA can afford to treat employees decently and speak to them decently now.

        • Mikeact says:

          8 May8 May 22:14

          What is ‘ excessively high ‘? I still have no idea what legacy pay amounts to…just interested to know.

        • Lady London says:

          8 May8 May 22:36

          Excessively high according to the sort of employer we’re talking about is if you have longstanding highly competent willing crew who happen to be on a base pay of £36k that would never be offered now, plus allowances of £8k, decent pension scheme etc. Also let’s say 5 weeks holiday plus Bank Holidays.

          Compare that to new staff being freely available to recruit on £13k base pay, about £12k of which you can get paid by the government by calling the crew member an apprentice, maximum allowances earnable 4-6k, 4 weeks holiday, lowest possible pension contributions to money purchase mastertrust only, and many other airlines offering still worse pay such as Ryanair. Still 7 applications for each job. These pay differences have existed for, what, 10-15 years?

          Wouldn’t most British employers say the former employee was excessively compensated and be willing to try to go through complicated procedures, possibly several times, in good times risking strikes, to lower the package or get rid of those longstanding employees?

          This is not my opinion but it’s what I see.

        • Rob says:

          8 May8 May 23:25

          Many other differences. Worldwide tend to get an extra day off before coming home vs Mixed Fleet for example IIRC. Costly on hotels for BA.

    • marcw says:

      7 May7 May 23:09

      Can they not make the “legacy” position redundant, rather than each individual employee?

      • C77 says:

        8 May8 May 03:58

        No because the job role of the legacy fleet crew pretty much mirrors the role and tasks which is now being recruited for under mixed fleet contracts.
        I mean they could but there’d be few thousand in line for unfair dismissal in employment tribunals as a result.

  • Dubious says:

    8 May8 May 06:42

    “..and said it would administer ‘self-help’ before seeking support..”

    Not nice and maybe there is a better/fairer way they are implemented, but aren’t redundencies to remove your outgoings (for the short and long-term) self-help?

    • Lady London says:

      8 May8 May 20:03

      I think by saying they would administer self help before getting any support, BA was trying to say self-flagellation. What they really intend sounder awfully like flagellation of longserving crew on legacy contracts that they’ve tried hard to eliminate apparently but had failed previously.

• Annette Thomas says:

  7 May7 May 20:35

  Let’s hope we get our refunds now for 6 return flights with Iberia from April

• Steve says:

  8 May8 May 06:03

  I’m surprised that Rob, with his financial background, is mixing a govt backed loan with a bailout. The loan needs to be repaid. What the likes of Norwegian have done is a bailout, an equity stake that is not repayable. I’d class this £300m as simply a liquidity grab. Not even close to being in the realms of a bailout.

  • Ralph says:

    8 May8 May 08:19

    Well said! ‘Bailout’ is not the correct term for this.

    IAG has simply accessed a loan facility open to any qualifying company in any sector. It is totally different to the bespoke cash handouts, part nationalisation etc. of airlines happening elsewhere in Europe.

  • Rhys says:

    8 May8 May 09:38

    A loan that wouldn’t be available under normal circumstances is a bailout of sorts.

    • marcw says:

      8 May8 May 13:50

      But it´s available to virtually or companies with tradeable debt, it´s not specific to a certain sector/company.

• NigelthePensioner says:

  8 May8 May 08:20

  Interestingly, IAG took this money in the second week of April, according to Bloomberg, which means that it was already in the bank when Alex Cruz made his statement about British Airways not getting a bailout.

  Yet more proof that Cruz hasnt an iota of a clue what is happening at BA and that it is his puppeteer Walsh who is manipulating the airline(s) – does he really believe that people dont see this??

• Jess says:

  8 May8 May 09:43

  Honestly, I’m done being loyal to British Airways and IAG. The way they have dealt with all of this is disgusting, not caring about their employees and just using them as pawns, compared to Virgin Atlantic who have done everything possible first to not have to make redundancies. My boyfriend works for Virgin and despite how horrible this all is, the leadership team have been as good as they can be, and have truly put their staff first.

  • Mikeact says:

    8 May8 May 09:58

    What have they done to not make redundancies? I didn’t quite understand.

    • davvero says:

      8 May8 May 11:27

      They’ve done nothing, except that I’m sure that Virgin have good PR internally just like externally. There’s probably been a video message with Branson on his island saying that he’s trying so hard for everyone.

      • Rhys says:

        8 May8 May 11:34

        The criticism levelled at BA was partly on the basis that they were reducing redundancy packages to the statutory minimum. Not sure what Virgin are doing but it seems like it’s slightly less frustrating for their employees given nobody has kicked a fuss

        • Anon says:

          8 May8 May 12:33

          BA is a textbook case study of poor industrial relations – whatever the rights and wrongs the level of animosity between BA and their staff is striking and it hurts BA. Management regularly show contempt for staff, staff hate management. On the other hand there seems to be significant good will between most Virgin staff and their employer. A close relative as a solicitor used to represent Virgin at employment tribunals and constantly expressed their surprise at the fondness for Virgin amongst former staff taking them to a tribunal! I would also hazard a guess BA spend a lot more on employment tribunals… This isn’t just internal and external PR – the Willie Walsh and Michael O’Leary management style clearly has an effect.

      • Anon says:

        8 May8 May 15:27

        Virgin have done plenty to avoid redundancies before announcing them, it’s well documented that execs took pay cuts, brand payment deferrals, retiring older fleet, network changes, staff agreeing to take unpaid leave and furlough of staff have all happened to try and avoid this, as time goes on it was inevitable. However not working for them, it’s not likely to be something you would grasp and always put it down to “good PR”. You don’t read about it because nobody complains and genuinely loves working for the company.

  • Ralph says:

    8 May8 May 10:14

    Losing a job is horrible, but both BA and Virgin have already taken all the obvious steps to cut costs to a bare minimum, preserve cash, draw down credit lines, use government schemes where possible etc. They still have a lot of fixed costs such as premises, essential staff, aircraft lease costs and maintenance etc. However, they can only operate a minimal flying schedule now and in a very best case scenario might operate 2/3 of their schedule by the end of the year. The furlough scheme will wind down and cease soon. No major airline has any option but to reduce staffing on a huge scale.

    • Harsh says:

      13 May13 May 01:29

      Ralph may be you need to understand what IAG and B.A are trying to do here. Willie Walsh is trying to put all staff on new lower pay and terms and condition contracts. Basically zero hours. I really don’t know what you do for a job, but I’m sure you would not work on zero hours contracts. IAG and B.A management have paid numerous fines over the years and recouped the money from their staff by cutting their salaries. Willie Walsh has earned over £30million in wages and bonuses over the years. Also Alex Cruz and the rest of the absurd board of directors have been taking huge bonuses, and what have the staff got. May be you should look deeper into the situation before making your ill judge comments. For your information the new contract the management is taking about £1000 month after all deductions for cabin crew. No fixed rosters, change to grievance and dismissal procedures meaning sacking staff without any notice or reason. Hope you can work for a company like this.As for the B.A using all avenues is total nonsense. This is all about getting rid of favourable contract employees for generating more profit. If they have used all avenues where are they getting the money to by Air Europa for £1.1billion, and also if the air travel is not getting back to normal say until 2023 as you believe why buy other airline. Good luck with your irrational thinking.

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