LONDON – British Airways is to suspend more than 30,000 staff, from cabin crew to ground staff, engineers and head office employees, until the end of May under the government furlough scheme for companies hit by the coronavirus pandemic. Meanwhile, Heathrow has announced it will shut down one of its two runways from Monday due to the reduction in flights, The Guardian reported.
“Although we are seeing significantly fewer flights at the moment, Heathrow will remain open so that we can continue to play a crucial role in helping to secure vital medical goods and food for the nation during this unprecedented epidemic,” a spokesperson for the UK’s biggest airport said.
BA, which grounded all its planes at Gatwick this week, announced that all suspended employees would be paid 80% of their salary under the terms of the state scheme, which caps the payout at up to £2,500 per month.
It has now reached deals with all three unions that represent its staff – Unite, GMB and the British Airline Pilots’ Association. The carrier is also encouraging its staff to join volunteering schemes. Unite stated workers would be able to divert their pension contributions, worth between 9% and 18% of earnings, into their pay for a short period of time. The BA furlough agreement runs up to late May.
At Gatwick and London City airport, all BA staff will be suspended after the airline stopped flying to and from both airports until the end of the virus crisis. It is still running short-haul and long-haul flights at Heathrow. BA employs 45,000 people in total, and has struck a separate deal with its 4,000 pilots, who will take four weeks’ unpaid leave between April and May.
“Given the incredibly difficult circumstances that the entire aviation sector is facing this is as good a deal as possible for our members. The deal protects the jobs of BA staff and, as far as possible, also protects their pay,” unite’s national officer for aviation, Oliver Richardson, noted.
“This is what can and should be done to protect workers during this unprecedented time for the airline sector,” he added.
BA’s parent company, International Airlines Group, also announced it had decided to reduce seat capacity further, by 90% in April and May compared with last year. BA is involved in arranging repatriation flights for the government, which has committed £75mln to bringing British nationals home. This week BA flew back more than 1,000 Britons from Peru.
The aviation industry has been hit hard by the travel restrictions imposed because of the coronavirus crisis. Thousands of staff have been temporarily laid off or are taking unpaid leave. EasyJet and Virgin Atlantic are setting up schemes for thousands of suspended crew to volunteer over the next two months with the NHS or work in supermarkets.
Staff from BA, easyJet and Norwegian served breakfast for NHS employees at the Whittington hospital in North London on Wednesday.
A pediatric registrar, Priyen Shah, tweeted that he was “completely blown away by the generosity of staff” from the airlines.
With future bookings canceled, European carriers are expected to lose £63bln in passenger revenues this year because of the travel bans, according to the International Air Transport Association (Iata).
Globally, the industry body expects airlines to lose $252bln (£203bln), almost halving the industry’s revenues compared with last year. The estimates assume three-month shutdowns across much of the world. Iata has also said many airlines do not have enough cash to see them through more than two months of shutdowns.
IAG, which also owns Iberia, is in a better financial position than other carriers. It has extended a £1.1bn credit buffer for BA by a year to June 2021. Overall, IAG has access to €9.3bln (£8.2bln) in cash, cash equivalents and loans to ride out the crisis. However, BA’s main rival, Virgin Atlantic, is in deeper trouble, prompting Airbus, Rolls-Royce and Heathrow to urge the government to bail out the carrier.