British Airways is flying directly into what businesses call a “people problem”.
The airline isn’t just lamenting a shocking health crisis which has crippled the transportation industry, it’s also dealing with foul bets on fuel trends, which just cost the airline €1.3 billion, according to financial documents from parent company IAG, at a time it desperately need cash.
But all things must pass, and neither covid-19, nor short term fuel losses, will ultimately be British Airways greatest challenge when the world reboots, it will be keeping the support of its employees. Right now, it’s disappearing by the minute.
Why? Because British Airways is choosing to let employees go now, rather than make efforts to retain them as long as possible during the crisis. Furthermore, sources state it’s using a health crisis to front a long held desire to layoff a legacy workforce, and bust unions.
It’s a “rip the band-aid off” move stemming from a unique position BA owner IAG has taken during these challenging times, essentially refusing the possibility of outside help in any form.
Unlike many airlines around the world, British Airways, and parent company IAG, has taken a crystal clear opinion on outside financial support, stating it doesn’t want any. As loses mount, the position is speaking volumes that this is about grudges and other desires, not a desire to protect its people.
British Airways doesn’t want any form of financial support, particularly from a government, and it doesn’t want other airlines to enjoy any either.
The clear motive from this is hoping to “go to ground”, and therefore forcing Virgin Atlantic and other less financially secure competitors like Norwegian under it, in the meantime.
It’s why employees from pilot groups to cabin crew unions are already outraged by the news that up to 12,000 jobs are in imminent jeopardy. It all follows on the heels of CEO Alex Cruz letter to employees which cites tough times ahead, and job losses all but certain.
Unions believe this is an attempt to bust them, and moves are being made in the name of a health crisis to fulfill long held desires for lower wages, fewer concessions and greater scopes of control.
Even the UK banking sector, often regarded as the most cut throat, is delaying layoffs in respect for how tough these times are. HSBC and Morgan Stanley postponed up to 45,000 total layoffs between them, with executives stating that it’s morally wrong to make any non essential redundancies in the middle of a historic recession, particularly when firings would be done via video. Morale matters.
If you wanted to summarize: the airline would rather not accept help from the UK Government, so that other airlines die, than save its own employees, even if the job savings are only temporary. It’s hoping the layoffs will effectively break unions and create a lower wage work force – something it could’ve never managed during ordinary times.
Arguably, the airline is capitalizing on covid-19.
Many of these jobs are unlikely to be around long term due to declining demand in air travel, but for employees facing incredible uncertainty, every paycheck matters. British Airways is telling staff that the airline cannot afford to keep them on, while telling investors through IAG press releases that it’s got plenty of cash. The two aren’t squaring, and employees are angry.
No paycheck presents awful challenges in terrible times, and employees always want to believe all efforts were made to prevent layoffs.
Across the pond, US airlines agreed to accept government funds to hold off job reductions through October. Though it’s unlikely a vast majority of jobs will be retained from that point onward, it gives employees facing redundancy a six month head start on finding what’s next, and making ends meet in the interim.
For BA’s employees, it could make all the difference, but all indications suggest parent company IAG has no interest in this pursuit, and is moving quickly to find where cuts can be made, and execute them. This is the ruthless style Willie Walsh is known for, and directly in line with a man who once put “show me the f**king money” into an IAG corporate investor deck.
It’s going to take years for airlines to reach previous levels, but rather than potentially accept money, or let the UK Government take out a stake in the airline to protect jobs in the interim, British Airways and IAG is choosing to let staff go, in ways beyond the scope of others.
Ultimately, layoffs will be coming to every airline around the world, but choosing not to protect staff right now is a choice. It may be the last waltz on the Titanic, but at least there’s music.
CEO Alex Cruz’s letter to employees states all efforts will be made to keep as many jobs as possible, but statements issued from pilots union BALPA suggest a “this is not good enough” approach. The airline quoted potential pilot layoffs in the hundreds, but new estimates suggest the number is over 1,000.
As employees see friends, colleagues and even family lose work when they need it most, British Airways is flying directly into a people problem. The people problem stems from choice.
British Airways has the capacity to apply for a low interest loan from the UK Government, even though it’s actually owned by a Spanish company (IAG), which enjoys Qatar Airways as its largest single shareholder. It could use this short term loan to boost staff in the interim, in hopes of a best case scenario, but is instead choosing to make future cuts now.
The concept of staff retention via a government loan would ultimately cost the airline (very cheap) interest, which IAG deems as unacceptable, particularly as the cuts would be coming anyway.
In a hard nosed world, ripping the band-aid off may do some good in the long term, but it’s going to create tremendous dissent within the workforce now, knowing jobs could’ve been saved, but greed, or some form of pride prevented it from happening.
GSTP wishes BA employees, and all airline employees the very best of health and luck. The virtual door is always open to bounce ideas, support, contact resources and help to any airline or travel industry employees, in any way. Just click “contact” and get in touch.