British Airways will today suspend around 36,000 of its 45,000 staff as coronavirus left the airline on its knees.
The airline has reached a broad deal with the Unite union that will include the suspension of 80 percent of its cabin crew, ground staff, engineers and those working at the head office in Harmondsworth, near Heathrow.
The furloughed UK staff are expected to receive some of their wages through the government job retention scheme, which offers them 80 percent of someone’s average pay up to £2,500-a-month.
The 36,000 job cuts came after BA axed all its flights to and from Gatwick Airport and London City – with BA only expected to keep flying from Heathrow Terminal 5 with a severely reduced schedule.
BA is owned by Madrid-based, International Airlines Group, whose boss Willie Walsh saw his pay jump 5.5% to £3.2 million last year – despite tumbling profits – and stands to retire in June with millions due in share bonuses over the next four years.
It is not yet known if he, CEO of British Airways Alex Cruz or other bosses will forgo any of their pay or bonuses as tens of thousands of staff face an uncertain future.
As BA edged towards a total shut down, it has also emerged:
- Boris Johnson is under growing pressure to show leadership over Britain’s testing fiasco as coronavirus deaths surge by 563 to 2,352;
- Just 2,000 of the NHS’ 500,000 staff have been tested as a fifth medic working on the frontline is killed by the virus;
- UK banks in the firing line as they ‘unfairly refuse’ rescue loans for coronavirus-hit firms;
- Six-week-old US baby dies after being rushed to hospital – as America’s death toll rises above 5,000 – as White House is told China has covered up the true scale of deaths there;
- Morgue the size of two football pitches is being built in east London to hold thousands of victims from NHS Nightingale, which opens this week;
BA has cancelled thousands of flights and has been inundated with refund requests – but they are taking two weeks or more to process, sparking fury among customers.
One tweeted today: ‘Their customer service is non-existent and is trying to hold onto the money that their customers work so hard for! This is a global pandemic that is affecting everyone. It’s been 3 weeks. That’s 21 days. I am in need of a refund not a voucher for another flight’.
Rebecca Eichler also took to social media and said: ‘My flight was cancelled and you have offered a full refund, which is only available by calling, but you are not accepting calls’.
BA is also among the airlines helping repatriate Britons stuck abroad following Foreign Secretary Dominic Raab’s pledge to set aside £75 million to help get people home.
The decision by BA to shut its Gatwick operation came hours after easyJet grounded its entire fleet of 330 aircraft and became the first UK airline to stop all its operations.
On Wednesday, Gatwick’s North Terminal shut with the South Terminal operating from 2 pm and 10 pm to cut costs, meaning most of the airport’s staff will be furloughed.
Those not furloughed, such as call center staff and those involved in live operations, will remain on full pay following the talks.
A source told The Sun: ‘Negotiations have been tough but there is an acknowledgment at BA and the union that these are unprecedented times.’
The agreement has yet to be fully signed off but it is thought this will happen early on Thursday morning. A spokesman for the airline told MailOnline: ‘Talks continue.’
With future bookings canceled, for the time being, airlines such as British Airways have been losing vast sums of money.
A British Airways spokesman declined to say how many of its workers’ jobs are under threat when asked earlier this week but said: ‘Due to the considerable restrictions and challenging market environment, like many other airlines we will temporarily suspend our flying schedule at Gatwick. We are contacting affected customers to discuss their options.’
Two weeks ago British Airways admitted coronavirus is threatening its very survival as staff was told there will be job cuts and aircraft must be mothballed because of the ‘worsening’ worldwide pandemic.
Chief Executive Alex Cruz wrote to all 45,000 workers saying the virus’ relentless spread is a crisis ‘of global proportions like no other we have to known’, more serious than the 2008 financial crash, SARS or 9/11.
But the chief executive of its parent company IAG, Willie Walsh, has also stressed that he had not requested a government bail-out and insisted IAG was ‘resilient with a strong balance sheet’, adding there is ‘no guarantee that many European airlines would survive’.
BA is one of many that are to stop serving the UK’s second busiest airport due to the collapse in demand caused by the coronavirus pandemic.
The airline will keep the equipment for essential functions at the airport, such as maintenance, towing and cleaning, to enable it to restart operations quickly.
Just 33 flights were due to take off or land at the West Sussex airport on Tuesday, according to aviation data provider FlightStats.
From Wednesday, Gatwick’s runway was only open for scheduled flights between 2 pm and 10 pm.
The airport also closed one of its two terminals.
The measures will be in place for a minimum of one month.
Airports are responding to the decision by airlines to suspend the majority of their flights due to demand plummeting and countries around the world introducing travel restrictions in a bid to slow the spread of coronavirus.
London City Airport closed its runway to all commercial and private flights last week while Southend Airport is only open on Tuesdays, Thursdays, and Sundays between 4.30 pm and 9.30 pm.
IAG recently announced three-quarters of flights will be cut over the next two months also said it was ‘taking actions to reduce operating expenses and improve cash flow’.
These include temporarily suspending employment contracts, reducing working hours and offering staff unpaid leave.
The group, which also owns Iberia and Vueling, employs 66,000 staff.
Airlines are in the process of temporarily laying off tens of thousands of staff without pay.
Amid warnings of an industry collapse within weeks, BA-owner IAG, EasyJet, Ryanair and Norwegian all revealed drastic plans to slash costs and ground flights.
Virgin Atlantic said staff had agreed to take eight weeks of unpaid leave over the next three months, with the salary docked from workers’ pay over six months so their income does not dry up.
All 10,000 employees of the company, founded and controlled by Richard Branson, will also be offered voluntary redundancy.
In a sign of the scale of the coronavirus crisis, the airlines have been backed by the union Unite and pilots association Balpa.
The most extreme measures were taken by Norwegian, which is the third-largest airline at Gatwick. It is temporarily laying off around 7,300 staff – 90 percent of its workforce.
The airline which is saddled with debt has lost more than 80 percent of its market value since the start of the year.
EasyJet’s founder Sir Stelios Haji-Ioannou yesterday justified the decision to pay a £174million dividend to shareholders including around £60million to his family just ten days before it grounded all its 330 planes.
The Luton-based airline employs 9,000 staff and is the first in the UK to stop all flights and mothball all jets since the coronavirus pandemic took hold in Britain.
Sir Stelios said the now-controversial dividends were agreed in February when ‘the world looked like a much happier place’ and the cash was ‘automatically’ paid to shareholders on March 20 and were ‘impossible to stop’.In an extraordinary statement the billionaire also said calls for him to give the money back were ‘naïve’ and ‘malicious’, adding easyJet ‘is not a charity’.
The grounding of easyJet’s gigantic fleet came just days after calling for a state loan to help them survive.
Justifying the £170million payout Sir Stelios, who with his siblings are the largest single shareholders in the carrier with a 34 per cent stake, insisted that the dividends were ‘legal’ and ‘rightful’.
He said: ‘The reality of the situation is the dividend was legally at the point of no return on the 6th of February, or at the very latest on the 27th of February 2020. The world looked like a much happier place on the 6th of February and the dividend was rightfully paid to all shareholders’.
In a lengthy statement, he said the payments could not have been stopped.
He said: ‘The dividends by the 20th of March we already paid automatically via a complex web of bank accounts where the shares are held and it is impossible to stop it for some shareholders but not for others’.
Sir Stelios is threatening to seek the removal of board members unless the airline withdraws from a contract with Airbus to provide 107 aircraft which he said will cost £4.5 billion.
In his statement earlier this week, he said journalists who asked whether he would hand his dividend back were ‘naïve/malicious’, adding: ‘I am perplexed as to how that would work?’, adding: ‘To be used how? To pay that money straight over to Airbus? And what is the consideration for such a gift? Or is it meant as a selfless charitable donation? Charity towards which deserving cause exactly? easyJet is not a registered charity to receive donations and neither is Airbus. That’s not how publically listed companies work’.