British Airways pilots vote for job and pay cuts in bid to avoid more redundancies

31 July 2020, 21:43 | Updated: 31 July 2020, 22:31

In April it announced that 12,000 British Airways jobs could be cut
In April it announced that 12,000 British Airways jobs could be cut. Picture: PA

By Megan White

British Airways pilots have voted to accept a package including job and pay cuts aimed at avoiding a larger number of redundancies, their union announced.

The British Airline Pilots Association (Balpa) said 85 per cent of its members voted in favour of the deal.

In April it announced that 12,000 British Airways jobs could be cut.

There will be around 270 compulsory redundancies and temporary pay cuts starting at 20 per cent, reducing to 8 per cent over two years before falling to zero over the longer term.

Balpa general secretary Brian Strutton said: "Our members have made a pragmatic decision in the circumstances, but the fact that we were unable to persuade BA to avoid all compulsory redundancies is bitterly disappointing."

The union said the package it helped negotiate was in response to BA's formal notification of 1,255 pilot job losses and the threat to fire and rehire the remaining pilots on worse conditions.

A BA spokesman said: "This is an incredibly difficult time for everyone at British Airways and we are grateful to Balpa and our flight operations team for the work they have done to reach this agreement and save hundreds of jobs.

"Today's financial results show the enormous challenge British Airways faces as it contends with the impact of the global pandemic and government travel bans, reducing demand for travel very significantly.

"We do not expect our company to return to 2019 levels of business until at least 2023 and therefore we need to act now to reshape our company for a very different future."

The news came as British Airways owner IAG swung to a pre-tax loss of 4.2 billion euro (£3.8 billion) in the first six months of the year.

This is down from a one billion euro (£0.9 billion) profit in the same period a year ago.

Revenue was 5.3 billion euro (£4.8 billion), some 56% lower than 2019's levels.

IAG announced a plan to strengthen its balance sheet by raising 2.75 billion euro (£2.49 billion) through a proposed capital increase.

Chief executive Willie Walsh said: "All IAG airlines made substantial losses. As a result of Government travel restrictions, quarter two passenger traffic fell by 98.4% on a capacity reduction in the quarter of 95.3%.

"We have seen evidence that demand recovers when Government restrictions are lifted.

"Our airlines have put in place measures to provide additional reassurance to their customers and employees on board and at the airport.

"We continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels."

IAG expects it will take until at least 2023 for passenger demand to recover to pre-coronavirus levels.

The firm said it is "restructuring its cost base to reduce each airline's size".

Mr Walsh said customers with pre-existing bookings are continuing to fly to and from Spain despite the UK Government's decision to advise against non-essential travel to the country and re-impose quarantine requirements for people returning.

He told reporters: "People who have had bookings, they appear to continue to be travelling to and from Spain."

He went on: "Our bookings are being suppressed by Government restrictions. When the restrictions of removed we see a significant increase in bookings."

Mr Walsh said the scale of the challenge faced by the airline industry after 9/11 in 2001 and the global financial crisis in 2009 is "much smaller" than what it faces due to the pandemic.

"Anyone who believes that this is just a temporary downturn and therefore can be fixed with temporary measures, I'm afraid seriously misjudges what the industry is going through.

"This will represent a structurally changed industry and that's why we've taken the action that we've taken and that's why we believe now the the right time to raise additional capital."

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