British Airways owner rebuffs calls to delay 12,000 job cuts

by Bloomberg May 14, 2020

British Airways owner IAG SA said it plans to go ahead with plans to cut up to 12,000 jobs, while its Chief Executive Officer Willie Walsh castigated the government’s handling of the coronavirus crisis.

The decision to quarantine travelers, along with Health Secretary Matt Hancock’s statement that “big, lavish international holidays” likely weren’t be possible this summer, “have seriously set back recovery plans for our industry,” Walsh said in a letter to the chairman of the U.K.’s transport committee.

IAG remains committed to its restructuring plans, Walsh said in the letter dated Wednesday. He had faced a grilling from lawmakers on Monday over plans to permanently slash British Airways’ workforce rather than take advantage of the government furlough scheme.

“We must act now to secure the maximum number of jobs possible, consistent with the reality of a structurally changed airline industry in a severely weakened global economy,” Walsh said. “I want to confirm therefore that we will not pause our consultations or put our plans on hold.”

Like other airline companies, IAG is contending with a historic drop in air travel due to the virus. The carrier drew criticism for announcing wide-ranging job cuts last month, while tapping a state-backed lending program, in a blow to a British government confronting a severe recession.

Walsh drew the ire of lawmakers Monday over his plan to lay off staff and change remaining employee’s terms and conditions. He said IAG wasn’t “picking on” British Airways and making use of furlough schemes would only give days of additional liquidity, not weeks or months.

Lawmakers also questioned the airline chief on how many customers had received refunds, with carriers facing accusations of delaying customer refunds to protect cash flow.

In the letter, Walsh said British Airways has provided cash refunds on 921,000 tickets, with 47,400 bookings still to be processed. Another 346,000 bookings were canceled by customers in return for a voucher, with a further 1,700 vouchers still to be processed.