British Airways burning through cash, CEO urges unions to engage

British Airways burning through cash, CEO urges unions to engage
British Airways came under heavy attack from lawmakers in parliament, who accused it of taking advantage of a government scheme to protect jobs while at the same time announcing plans to cut its workforce by 28 percent. (AFP)
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Updated 04 June 2020

British Airways burning through cash, CEO urges unions to engage

British Airways burning through cash, CEO urges unions to engage
  • Job losses necessary as cash reserves of IAG, British Airways’ parent company, would not last forever

LONDON: The boss of British Airways said its parent company IAG was burning through $223 million a week and could not guarantee its survival, prompting him to urge unions to engage over 12,000 job cuts.
British Airways came under heavy attack from lawmakers in parliament on Wednesday, who accused it of taking advantage of a government scheme to protect jobs while at the same time announcing plans to cut its workforce by 28 percent.
Planes were grounded in March due to coronavirus restrictions, forcing many airlines to cut thousands of staff as they struggle without revenues. Airlines serving Britain now face an additional threat from a 14-day quarantine rule.
In an internal letter to staff seen by Reuters, Alex Cruz, the chief executive of British Airways said the job losses were necessary as IAG’s cash reserves would not last forever and the future was one of more competition for fewer customers.
BA also wants to change terms and conditions for its remaining workers to give it more flexibility by, for example, making all crew fly both short and long-haul.
Cruz said IAG, which also owns Aer Lingus, Iberia and Vueling, was getting through $223 million a week, meaning that it could not just sit out the crisis. The group had €10 billion of liquidity at the end of April.
“BA does not have an absolute right to exist. There are major competitors poised and ready to take our business,” Cruz said in the letter.
He urged two unions which represent cabin crew and other staff, GMB and Unite, to join in discussions to mitigate proposed redundancies. Pilots union BALPA is “working constructively” with the airline, he added.
Cruz also joined other airline bosses in criticizing Britain’s quarantine rule, due to come into effect on June 8, calling it “another blow to our industry.”


Boris Johnson: UK government looking at conduct of Arcadia directors

Updated 55 min 19 sec ago

Boris Johnson: UK government looking at conduct of Arcadia directors

Boris Johnson: UK government looking at conduct of Arcadia directors
  • ‘We will be doing everything we can to restore the high streets of this country’
LONDON: British Prime Minister Boris Johnson said on Wednesday the conduct of directors of the collapsed fashion group Arcadia would be examined.
“The secretary of state for business, enterprise and skills (Alok Sharma) has written to the Insolvency Service to look at the conduct of the Arcadia directors,” Johnson told parliament.
Arcadia, owned by Philip Green, entered administration on Monday, threatening 13,000 jobs.
“We will be doing everything we can to restore the high streets of this country,” Johnson added.
Sharma said he had asked the regulator to review a report from Arcadia’s administrators as soon as they received it.
“If you decide that there are grounds for an investigation, I would ask that it looks not only at the conduct of directors immediately prior to and at insolvency, but also at whether any action by directors caused detriment to creditors or to the pension schemes,” he said in the letter.