British Airways in talks with the UK trade union to lay off 80% of its workforce

The
Coronavirus driven curbs on traveling continue to hit the global airline
industry. Prime Minister Boris Johnson had recently recommended the UK airlines
to explore their options to raise funds and survive the pandemic before relying
completely on the government aid.

According
to BBC’s report on Wednesday, however, British Airways is struggling to sustain
its financial stature as it announced its plans of laying off 36,000 workers to
cut costs. As per the sources, discussions with Unite (UK trade union) are
currently ongoing and the decision has not been finalized yet.

Layoff To Affect Ground Staff, Engineers, Head Office Employees, And Cabin Crew

Sources
also added that the UK’s flagship airline signed an agreement with the trade
union that it allows it to suspend 80% of its workforce comprising ground
staff, engineers, head office employees, and cabin crew. British Airways,
however, will continue to employ the staff.

Last
week, the
airline had also canceled flights from London’s City Airport and Gatwick
Airport. British Airways’ parent company, International Airlines Group (LON:IAG),
also accentuated in a recent statement that in April and May, British Airways
is likely to see a 75% reduction in flying capacity.

As
the Coronavirus driven uncertainty rose, the airline had also given an early
warning that it will have to resort to cutting spending in order to survive the
health emergency that has pushed the global economy into recession.

Reportedly,
British Airways has also stricken a deal with its pilots that entails them
taking unpaid leave for two weeks in April and May.

EasyJet
Grounded Its Entire Fleet Amidst The Coronavirus Emergency

The
ongoing health emergency has brought the global travel and tourism industry to
a near halt. A sharp decline in demand had recently pushed several major
airlines into minimizing operations by 90% with a few of them like EasyJet,
announcing their entire fleets grounded for an indefinite period.

The
Air Transport Action Group had previously reported that the worldwide air
transport sector employed around 65 million people in 2019. With COVID-19
hurting demand and disrupting operations, however, airline trade groups are now
estimating unprecedented job cuts this year if massive rescue funds are not timely
dedicated to the sector.

At
the time of writing, IAG is exchanging hands at 209 pence per share in the
stock market that translates to a little under 70% decline in 2020 so far. IAG
currently has a market cap of £4.15 billion with a price to earnings ratio of
2.79.