British Airways has warned that its survival is at stake with its CEO telling staff of plans to cut jobs and ground aircraft to tackle the ‘worsening situation’ caused by coronavirus.
Chief Executive Alex Cruz told BA’s staff in a message titled ‘the survival of British Airways’ that coronavirus was causing a crisis ‘of global proportions like no other we have known’, more serious than the financial crisis, SARS or 9/11.
‘Please do not underestimate the seriousness of this for our company’ the message read, according to Reuters. Airlines around the globe are cutting flights and costs amid plunging demand and travel restrictions. Europe’s second biggest airline Lufthansa is reported to have asked for state aid and low-cost carrier Norwegian is pleading for help.
Companies were dealt a huge blow this week when Donald Trump made the unprecedented step of cancelling flights from 26 European countries to the US for 30 days. The aviation industry is braced for further failures as the coronavirus pandemic worsens and more countires impose lockdowns.
Experts have warned that no company is exempt from the knock-on effects of the virus that has already seen Europe’s largest regional carrier Flybe collapse. Cruz said that BA, which along with Iberia and Aer Lingus is part of the financially strong IAG, was more resilient ‘than ever before’ with a strong balance sheet.
But the airline was under ‘immense pressure’ and would ‘have to react fast and definitively in response to the worsening situation’. As a result, jobs would be lost ‘perhaps for a short period, perhaps longer term’.
BA employs around 45,000 staff and the company has not confirmed how many jobs could get axed. Mr Cruz said the company was in discussions with trade unions over job losses, adding aircraft would be grounded in a way that the airline has never had to do before. While the UK was exempt from US travel restrictions announced on Thursday, several airlines have cancelled flights to the states as well as Italy, China and South Korea.
New government advice warning against all but essential travel to parts of Spain on Friday could further hurt BA, which under normal circumstances has 17 flights to Madrid daily, plus dozens to other Spanish cities. Shares in IAG traded up 8% in the hour after Cruz’s warning over jobs. IAG’s stock price has fallen by 42% in the last month.