LONDON (Reuters) - The boss of British Airways said its parent company IAG ICAG.L was burning through 178 million pounds ($223 million) a week and could not guarantee its survival, prompting him to urge unions to engage over 12,000 job cuts.
British Airways came under heavy attack from lawmakers in parliament on Wednesday, who accused it of taking advantage of a government scheme to protect jobs while at the same time announcing plans to cut its workforce by 28%.
British Airways and IAG did not attend a meeting with interior minister Priti Patel on Thursday, an IAG spokeswoman told Reuters in an emailed statement.
The meeting was meant to discuss the UK’s new quarantine plans, with a media report saying that the operator was upset at what it saw as a lack of consultation over the quarantine’s introduction.
Planes were grounded in March by the coronavirus crisis, forcing many airlines to cut thousands of staff as they struggle without revenues. Airlines serving Britain now face an additional threat from a 14-day quarantine rule.
In an internal letter to staff seen by Reuters, Alex Cruz, the chief executive of British Airways said the job losses were necessary as IAG’s cash reserves would not last forever and the future was one of more competition for fewer customers.
BA also wants to change terms and conditions for its remaining workers to give it more flexibility by, for example, making all crew fly both short and long-haul.
Cruz said IAG, which also owns Aer Lingus, Iberia and Vueling, was getting through 178 million pounds a week, meaning that it could not just sit out the crisis. The group had 10 billion euros of liquidity at the end of April.
“BA does not have an absolute right to exist. There are major competitors poised and ready to take our business,” Cruz said in the letter.
He urged two unions which represent cabin crew and other staff, GMB and Unite, to join in discussions to mitigate proposed redundancies. Pilots union BALPA is “working constructively” with the airline, he added.
Cruz also joined other airline bosses in criticising Britain’s quarantine rule, due to come into effect on June 8, calling it “another blow to our industry”.
Reporting by Sarah Young; additional reporting by Kanishka Singh; editing by Kate Holton and Grant McCool
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