Angrycat is quite right. Both BA and Virgin have been around long enough to know that recessions come with great regularity every ten years or so - and invariably they, in common with most carriers, go into them with a massive overhang of staff and newly ordered aircraft.
I don't remember Maggie Thatcher coming to the rescue of her 'knight in a shining fuselage' when Laker Airways was put out of business by BA (amongst others). Nor do I recall anyone coming to the rescue of Air Europe or Dan Air - or even Gill Airways!
So no, I think that the provision of monies equal to 4/365 is more than generous - especially bearing in mind that those carriers did not incurr any direct operating expenses on those days yet retained any revenue from tickets sold.
BA's primary problems are excessive management layers and high costs. They could save significant sums of money through the disposal by sale and leaseback of assets like Waterworld; and by straight sale of assets such as BACE.
These figures provided by gas path in another thread:
AREA..............NUMBERS.....% COST...PROP COST
Head office............5%.........7%........1.4
Cargo..................5%.........5%........1.0
Sales and marketing...12%........11%........0.9
IM.....................4%.........4%........1.0
Engineering...........15%........13%........0.8
Airports..............24%........17%........0.7
Cabin Services........28%........25%........0.9
Flight Operations......7%........18%........2.6
It is therefore very plain to see that the most expensive department is flight operations, with salaries representing 2.6 times their proportionate share based on staffing levels.
Head office expenses are nowhere near as bad, coming in at 1.4 times their proportionate share. Note how low the proportionate share is for engineering, cabin crew and airport staff.
On this basis, I would say that the maximum proportionate share for flight operations should be 1.5, which would have an effect of a 42% reduction of costs. There's no doubt that flight crew salaries at BA are excessive for many, and that BA is now paying the penalty for that.
BA's other major problem area is that it has a relatively young - and therefore very expensive in lease rental terms - fleet. Sure, it's nice to have shiny new aircraft that save you lots of money in terms of fuel burn, maintenance and flight deck complements. But with a B777 or B747-400 costing well over $1m rental per month - regardless of whether or not they use it - BA like Virgin must be kicking themselves for ordering so many.
Ironically, the reason they both are accellerating the retirement of their classics is not so much because of the extra operating costs (which are relatively minor) but because they cost them nothing to park, being fully depreciated. Had they been able to return the new aircraft to the lessors, it would have made far more sense for them to do so.
So what will be the medium and long term affects of this shakeout?
1) Consolidation - I believe that over the coming months we'll see a consolidation of the industry especially in Europe. This will lead to mergers, creating several 'supercarriers' - and I'd say that the carriers in the strongest position to acquire others would include SAS, KLM and Lufthansa. BA is much more likely to be taken over than to be an acquirer.
2) New carriers - there will be a spate of startups, each with a niche market. Blue Fox is one such carrier. Gone will be the traditional concept of 'flag carriers' with their 'all things to all people' approach.
3) Warsaw Convention - the 'six freedoms' will also disappear, at least here in Europe. Those rights would apply to Europe as a whole rather than to individual countries, so that instead of just BA being allowed to operate LON-TYO any European carrier could do so; and conversely any UK carrier could operate long haul from any point. This already applies intra-EU.
4) Superhubs - a major consequence of the loss of flag carriers will be the long term creation of one or two 'superhubs' in Europe, which will be where long haul flights will depart and arrive from. Regional airlines will feed passengers from across the continent operating both hub and spoke and point to point services.
5) Pay and Working Conditions - there's no doubt at all that there's going to be a major shake-up of pay and working conditions throughout the industry. As the figures above show, the proportion of money that flight operations receive is disproportionate to everyone else. Therefore, pay for pilots - especially at the more senior levels - will be cut drastically; and there will be a closer correlation with other employees. At the same time, the seniority system will also be abolished, which has benefits for everyone. This means that if an airline wishes to recruit B747 pilots it can do so for any position; equally if it wishes to dispense with a fleet it no longer has to retain those people connected with it. From the employee's perspective, it means that s/he has a tradeable commodity in terms of qualifications and therefore would be able to move around the industry at will without having to take into account the loss of existing seniority coupled with the problems of joining another company at the bottom of the seniority table. Promotion would be based on merit and individual circumstances.
6) Fares - by specialising in niche markets, benefits of economies of scale will be available to the operators. This will have the effect of reducing overall costs, which keeps fares down.
So in summary - if BA and VS disappear, will it mean the end of the world as we know it? No, not really. Nature abhors a vaccuum, and there are other carriers ready, willing and able to step into the breach - as there are with Sabena and Swissair at present.
Pay levels for many pilots will drop substantially, but at the same time the removal of the seniority system will make moving from one airline to another much easier.
We have a choice. Short term pain for long term gain: or short term gain for long term pain. Which would you prefer?