British Airways in talks with the UK trade union to lay off 80% of its workforce
- British Airways expected to suspend 36,000 workers to cut costs.
- Talks with Unite (UK trade union) for the proposed layoff are currently ongoing.
- Layoff will affect ground staff, engineers, head office employees, & cabin crew.
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.
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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.