Flag carrier British Airways Public Limited Company is set to lay off thousands of its employees amid the huge drop in air travel demand over fears of the coronavirus outbreak.
The company revealed in a letter to the British Airline Pilots Association (BALPA) Union on Tuesday that it would let go of 1,130 flight captains and co-pilots, alongside 16,500 cabin crews as operations were hugely affected by the global pandemic.
“In a short space of time the situation has significantly deteriorated,” the company said.
“There are no clear signs of improvement in air passenger demand,” it added.
British Airways said that its pilots should expect no more than minimum entitlements in severance pay.
“Under the current circumstances, the cost of delivering any enhanced voluntary redundancy programme will now be prohibitively expensive,” the letter read.
“Subject to consultation, we are proposing to meet minimum statutory obligations only, along with any contractual notice pay,” it added.
The company’s major competitors namely Lufthansa and Air France-KLM are putting off redundancies as they await bailouts from the government worth billions of euros.
British Airways’ parent firm International Airlines Group, meanwhile, is set to cut 12,000 employees and productivity gains from the remaining 30,000 without government rescue aid.
“It is worth noting that many of British Airways’ competitors in Europe and globally are receiving state aid in various forms,” the company said.
“The resulting competitive environment will create a distorted market where some of those competitors will have the option to provide overcapacity and lower fares,” it added.
Speaking on behalf of the union, BALPA General Secretary Brian Sutton said that the company could not justify the job cuts after it declined rescue aid from the government.
“BALPA is fighting to save every pilot job at BA,” he said.
Besides job cuts, British Airways said its remaining employees would likely be impacted as it seeks to pursue “flexibility and efficiency changes” that would account for 15% of redundancies.
Prior to the lay-off, it can be learned that British Airways suspended earlier this month some 30,000 staff, comprising of cabin crew, ground staff, engineers, and head office employees, with 80% of their wages funded by the government’s job retention scheme.
Under the job retention scheme, the UK government funds 80% of an employee’s salary capped at a maximum of £2,500 a month.