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Aviation - British Airways fights to survive as Air Transport’s recovery stalls

Sky News reports that British Airways expects unions to agree to new terms and conditions this week, ending a rancorous dispute that has soured relations between staff and management and compounded the airline's challenge in managing the impact of coronavirus. BA chief executive and chairman Alex Cruz told the Parliamentary Transport Select Committee that unions were balloting members this week and was confident that a deal in principal agreed last week would be approved.

Mr Cruz told MPs that the new terms for staff were necessary because the airline is "fighting for its survival" as a consequence of the pandemic. The airline has been in dispute with unions representing ground staff and cabin crew since it announced plans to make 13,000 redundancies and impose new contracts that cut pay by around 20% for some. The pilots union BALPA has already reached a deal with BA.

The threat to ‘fire and rehire’ staff drew a furious response from unions and staff who staged a series of protests and threatened strike action. Last week BA said it had agreed a deal-in-principal with unions which Mr Cruz told MPs would see new terms agreed rather than imposed. "Since the non-pilot unions began to engage we have been able to reach agreements and the remaining large areas of BA are being balloted... [if approved] this will mean there will be no need to issue new contracts, there will be amendments to existing contracts," he said.

Mr Cruz said that the new terms would see pay cuts of around 15% for some staff, and confirmed that they would include lay-off clauses and provisions for extended unpaid leave. Trade union Unite confirmed to Sky News that "legacy" cabin crew, those employed before 2010, are being balloted on an offer from BA this week but said outstanding issues remain for mixed-fleet cabin crew, those hired since 2010, and Heathrow ground staff. Mr Cruz told MPs that the new terms reflected the fact BA expected to fly only around 25% of its normal passenger volume this winter. He said the airline was "burning through" £20m every day and its cash reserves had reduced by £500m in the year to June.

Above - The airline's Boeing 747s have already fallen victim to the downturn and are being retired.

"This is the worst crisis that British Airways has gone through in its 100 years of history," Mr Cruz said. "We're still fighting for our own survival. We are taking every measure possible to make sure we can actually make it through this winter. We do not see a short-term coming back of our passengers. All the feedback we get ... is still pointing at a slow recovery process."

Mr Cruz, who was paid more than £800,000 last year and has taken a 33% pay cut since the pandemic began, called for the Government to approve enhanced testing for air travellers and make changes to its quarantine rules. He said BA was keen to introduce testing on flights between London and New York, and said the weekly changes to the quarantine list was hugely disruptive.

"The weekly announcements of countries going in and out of the list is incredibly disruptive to passengers, who are forced to make changes at the last minute or come back at the last minute, and also to airlines like ourselves which have to stand-by many aircraft. An enhanced criteria scheme to make it more consistent and see fewer changes would be hugely welcome."

© Sky News / Paul Kelso

Aviation – Stalled Recovery

With governments around the world still imposing travel restrictions and adding countries to quarantine lists, there is a real fear surrounding the possibility – or even a probability - of a second wave of Covid-19 infections and cases in recent weeks, and many airlines had already responded to most recent changes in travel requirements from countries across the globe. Although hopes had been expressed of a reasonably quick rise, the prospects of a rapid recovery have faded.

The statistics are not encouraging; global capacity remains at 46% of that operated at this time last year, 1.25 billion fewer scheduled seats have been available this year compared to last year, sixty fewer airlines are now operating and many airlines are making further redundancies as they prepare for the winter season. Carriers around the world continue to ask for Government support.

Overall, the air transport industry faces a steady reduction in capacity until the end of October and perhaps until the end of the year. The first week of October, the usual start of the Winter Season for airlines is October and currently there are some 73.6 million seats set to operate; that may soon become an optimistic planning forecast.

OAG’s John Grant reported that at the beginning of September, ‘the next six weeks [would] shape the aviation, travel and tourism recovery through 2021 and beyond. Rapid actions need to be taken, powerful and strong commitments made by regulators and consumer confidence could be restored. One-third of the way through that period and it feels that little has happened to believe that a way forward will be found; indeed, more barriers and restrictions are being imposed.

At some point there will be a recovery and those travel restrictions will be lifted and Governments will once again be encouraging us to travel and build new trade links and visit new destinations. If at that point Governments look around and wonder - where are those airlines that they now need and see only a smattering of carriers have survived, then only at that point will they realise how much good and value aviation created for everyone.

And at that point, who do they blame then?’

All images © Kevan James

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