Union says BA agrees deal to suspend thousands of staff, owner scraps dividend

British Airways planes are parked at Heathrow airport in London on April 2, 2020. The carrier is expected to suspend 32,000 staff amid the coronavirus crisis. (AFP)
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Updated 02 April 2020

Union says BA agrees deal to suspend thousands of staff, owner scraps dividend

  • The Unite union said it had agreed a deal with the British flag carrier to furlough workers on 80% of pay
  • Owned by IAG, one of the largest and most financially robust airline companies in the world, British Airways has already said it is in a fight for survival

LONDON: British Airways has struck a deal to suspend thousands of staff in one of the airline industry’s most dramatic moves yet to survive the coronavirus pandemic, its union said.
The Unite union said it had agreed a deal with the British flag carrier to furlough workers on 80% of pay, with no cap on earnings, and without anyone being made redundant.
A person familiar with the situation had earlier told Reuters that BA was working on a deal to suspend around 32,000 staff but they were still agreeing the terms.
British Airways declined to comment in response to Unite.
Having already agreed a 50% pay cut for its pilots, the deal addresses around 80% of its cabin and ground crew, engineers and office staff to see it through the worst crisis in its history.
“Given the incredibly difficult circumstances that the entire aviation sector is facing, this is as good a deal as possible for our members,” Unite national officer Oliver Richardson said.
“The deal protects the jobs of BA staff and, as far as possible, also protects their pay.”
Owned by IAG, one of the largest and most financially robust airline companies in the world, British Airways has already said it is in a fight for survival.
Separately, on Thursday IAG canceled its final dividend, saving €337 million ($366 million). The stock had risen on the jobs plan, but closed down 1%.
Hundreds of companies across a range of sectors have scrapped dividends to conserve cash, but the move by IAG marks a particular blow for investors because it was the third highest yielding stock by dividend on the UK’s benchmark FTSE 100.
With planes unable to fly because of travel restrictions, compounded by a plunge in demand over fears of contagion, airlines worldwide have grounded most of their fleets, and many have said they need government support to survive.
British Airways has joined the global industry race to conserve cash. In recent weeks Qantas Airways put two-thirds of its workforce — 20,000 workers — on leave, while Lufthansa applied for short-time work for around 31,000 crew and ground staff at its core brand until the end of August.
British budget airline easyJet has said it will lay off its 4,000 UK-based cabin crew for two months.
US airlines are set to receive $25 billion in grants to cover payrolls over the next six months, but are still encouraging workweek reductions, unpaid leave and early retirement as they face more cancelations than bookings.
The companies are trying to avoid making staff redundant so they can respond quickly to any increase in capacity when a recovery comes.
British Airways had been in talks with the Unite union for a week.
IAG, which owns 598 aircraft across its network which also includes Aer Lingus, Iberia and Vueling, is cutting capacity by 75% in April and May. BA has already suspended flights from Britain’s second busiest airport, Gatwick, and London’s City Airport.
In Europe, more than 20,000 flights departed or landed on Jan. 23. Two months later, after Italy emerged as an epicenter for the virus and travel restrictions went into force, flights dropped to fewer than 5,000 per day.
Britain has launched a job retention scheme which covers 80% of salary capped at a maximum of £2,500 ($3,093) a month. But some airlines including rival Virgin Atlantic have said they will collapse if they do not get more help.


Turkish Airlines may delay delivery of Airbus, Boeing planes

Updated 27 May 2020

Turkish Airlines may delay delivery of Airbus, Boeing planes

  • The carrier plans to begin some domestic flights on June 4 and international on June 10
  • Airlines chairman said the impact of the coronavirus on market could last up to five years

ISTANBUL: Turkish Airlines, which halted nearly all of its passenger flights as a result of the coronavirus crisis, may delay the delivery of some Boeing and Airbus planes, its chairman was quoted as saying on Wednesday.
The carrier plans to begin some domestic flights on June 4 and some international flights on June 10 as airlines worldwide try to get planes flying again after a global travel slump.
But Turkish Airlines chairman Ilker Ayci said in an interview with Turkey’s Hurriyet newspaper that the impact of the coronavirus could last up to five years and that it would take a while to reach 2019 load factor levels.
Turkish Airlines had received half of its order for 25 Boeing 787-9 planes, he said, adding that the delivery of the rest could be delayed.
The airline is in talks to take delivery of Airbus 350-900s that are ready from an order of 25, and that it was working to delay the delivery of the rest, he said.
“We are trying to lighten the serious loads that could arise. We are getting our narrow-body planes.”
Ayci said Turkish Airlines would no longer offer free in-flight food and drinks on domestic flights and other flights shorter than two hours.
He also repeated that the company would try to maintain employment, but that salaries would have to be adjusted, with the aim of supporting those paid the least.