IAG: BA restructuring may cost 12,000 jobs
Result announced..
85% in favour of accepting proposals..
15% Against
Turnout 87%
No further info on why the delay or if proposals had indeed changed.
Edit to add BALPA Media Release:
85% in favour of accepting proposals..
15% Against
Turnout 87%
No further info on why the delay or if proposals had indeed changed.
Edit to add BALPA Media Release:
Release date: 31/07/2020
Pilots in British Airways have voted to accept the deal negotiated by BALPA in response to BA’s formal notification of 1255 pilot job losses and their threat to fire and rehire the remaining pilots on worse conditions. The deal means that there will be temporary 20% pay cuts reducing to 8% over two years and towards zero over the longer term. Regrettably, there will still be some compulsory redundancies which are currently estimated to be 270 although that number will fall as mitigations take effect. There will be no fire and rehire of pilots.
BALPA General Secretary Brian Strutton said “Our members have made a pragmatic decision in the circumstances but the fact that we were unable to persuade BA to avoid all compulsory redundancies is bitterly disappointing.”
The ballot result was 85% to accept the deal on an 87% turnout. British Airways employs 4300 pilots.
Pilots in British Airways have voted to accept the deal negotiated by BALPA in response to BA’s formal notification of 1255 pilot job losses and their threat to fire and rehire the remaining pilots on worse conditions. The deal means that there will be temporary 20% pay cuts reducing to 8% over two years and towards zero over the longer term. Regrettably, there will still be some compulsory redundancies which are currently estimated to be 270 although that number will fall as mitigations take effect. There will be no fire and rehire of pilots.
BALPA General Secretary Brian Strutton said “Our members have made a pragmatic decision in the circumstances but the fact that we were unable to persuade BA to avoid all compulsory redundancies is bitterly disappointing.”
The ballot result was 85% to accept the deal on an 87% turnout. British Airways employs 4300 pilots.
Last edited by wiggy; 31st Jul 2020 at 20:19.
A dose of economic reality from today's Times:-
What a way to bow out. Willie Walsh retires on September 24 after 15 years at the controls of first British Airways and then its parent IAG. And look at his parting gift to shareholders: a half-year loss of €4.2 billion pre-tax and confirmation that he’s asking around for €2.75 billion of refuelling.
How’s that for perspective on claims from the Unite union that the BA owner is merely suffering a bout of “temporary” turbulence and that Mr Walsh is relishing the chance to settle old scores with the cabin crew? As he puts it: “The idea that there is some unfinished business is complete nonsense.”
Indeed, if Mr Walsh’s last ever IAG figures aren’t a wake-up call for the Unite boss Len McCluskey, it’s hard to guess what is. Ditto for a bunch of delusional MPs, led by Huw “Make it Up” Merriman, the Tory who’s somehow chairman of the transport committee. No one is happy that a pandemic has forced BA to cut up to 12,000 of its 42,000 staff or that, as a last resort, it would “fire and rehire” the rest on new terms if they won’t agree “reasonable” changes to legacy contracts. Mr Walsh understands “this is distressing for everybody”.
But he’s right that Unite is “blind and deaf to the reality” of this crisis, complete with an absurd threat to strike when most planes are already on the tarmac. So, too, are the 100-plus MPs who’ve joined the union in a kamikaze campaign to strip BA of Heathrow slots. They need to look at the latest figures.
Yes, they include a €1.27 billion hit from “overhedging” fuel that IAG wasn’t using and writedowns on the older planes being retired early. But second-quarter operating losses were a record €1.37 billion. BA, the biggest airline in a group also spanning Iberia and Aer Lingus, was the hardest hit. In the three months to June 30, it lost £711 million. Compare the quarter after 9/11: a loss of £187 million. Or the worst quarter of the financial crisis: £309 million losses.
Covid-19, says Mr Walsh, is an “unprecedented crisis”. To boot, he reckons it will take “until at least 2023 for passenger demand to recover to 2019 levels”. First-half passenger revenue fell 61 per cent. And BA is in the eye of the storm. It’s dependent on long-haul traffic, not least its transatlantic business shuttle where Mr Walsh is braced for a “structural” drop in demand. The half-year results show the hit to BA: from €873 million operating profits to €1.09 billion losses.
The upshot? A group that for all its €8.1 billion liquidity is lugging around €10.5 billion net debt: a vast sum for a business valued at €3.3 billion on shares down 9 per cent to 164¾p. Hence the cash-call. It’s led to IAG’s biggest investor, Qatar Airways with 25.1 per cent, claiming two board seats, even if Mr Walsh insisted it was “not the price” of its “irrevocable” support. Hence, too, the need for restructuring to give IAG a “viable” future and “protect as many jobs as feasible”.
Of course, Mr Merriman thinks Mr Walsh’s efforts at BA a “national disgrace”. But luckily the MP doesn’t run the airline. As Mr Walsh noted, that job requires “doing what’s necessary” even when you “don’t want” to do it. He didn’t want to bow out like this.
What a way to bow out. Willie Walsh retires on September 24 after 15 years at the controls of first British Airways and then its parent IAG. And look at his parting gift to shareholders: a half-year loss of €4.2 billion pre-tax and confirmation that he’s asking around for €2.75 billion of refuelling.
How’s that for perspective on claims from the Unite union that the BA owner is merely suffering a bout of “temporary” turbulence and that Mr Walsh is relishing the chance to settle old scores with the cabin crew? As he puts it: “The idea that there is some unfinished business is complete nonsense.”
Indeed, if Mr Walsh’s last ever IAG figures aren’t a wake-up call for the Unite boss Len McCluskey, it’s hard to guess what is. Ditto for a bunch of delusional MPs, led by Huw “Make it Up” Merriman, the Tory who’s somehow chairman of the transport committee. No one is happy that a pandemic has forced BA to cut up to 12,000 of its 42,000 staff or that, as a last resort, it would “fire and rehire” the rest on new terms if they won’t agree “reasonable” changes to legacy contracts. Mr Walsh understands “this is distressing for everybody”.
But he’s right that Unite is “blind and deaf to the reality” of this crisis, complete with an absurd threat to strike when most planes are already on the tarmac. So, too, are the 100-plus MPs who’ve joined the union in a kamikaze campaign to strip BA of Heathrow slots. They need to look at the latest figures.
Yes, they include a €1.27 billion hit from “overhedging” fuel that IAG wasn’t using and writedowns on the older planes being retired early. But second-quarter operating losses were a record €1.37 billion. BA, the biggest airline in a group also spanning Iberia and Aer Lingus, was the hardest hit. In the three months to June 30, it lost £711 million. Compare the quarter after 9/11: a loss of £187 million. Or the worst quarter of the financial crisis: £309 million losses.
Covid-19, says Mr Walsh, is an “unprecedented crisis”. To boot, he reckons it will take “until at least 2023 for passenger demand to recover to 2019 levels”. First-half passenger revenue fell 61 per cent. And BA is in the eye of the storm. It’s dependent on long-haul traffic, not least its transatlantic business shuttle where Mr Walsh is braced for a “structural” drop in demand. The half-year results show the hit to BA: from €873 million operating profits to €1.09 billion losses.
The upshot? A group that for all its €8.1 billion liquidity is lugging around €10.5 billion net debt: a vast sum for a business valued at €3.3 billion on shares down 9 per cent to 164¾p. Hence the cash-call. It’s led to IAG’s biggest investor, Qatar Airways with 25.1 per cent, claiming two board seats, even if Mr Walsh insisted it was “not the price” of its “irrevocable” support. Hence, too, the need for restructuring to give IAG a “viable” future and “protect as many jobs as feasible”.
Of course, Mr Merriman thinks Mr Walsh’s efforts at BA a “national disgrace”. But luckily the MP doesn’t run the airline. As Mr Walsh noted, that job requires “doing what’s necessary” even when you “don’t want” to do it. He didn’t want to bow out like this.
if Mr Walsh’s last ever IAG figures aren’t a wake-up call for the Unite boss Len McCluskey, it’s hard to guess
Probably best if somebody with more insight can confirm, deny, or provide more detail.
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Bergerie1
There is no doubt the numbers speak for themselves in pure business terms. Indeed, action is required and will unfold.
However this is not solely about business, it is a company that is portrayed proudly as the British National Flag carrier.
What constitutes the title of “National Flag Carrier” and how to you quantify the benefits??
What part of the very core of BA today is actually British?
In my view the use of “British” does need tighter scrutiny and proportionate
influence/control from the British government as a cost for using our flag. This usage needs to be born in mind when criticising our elected MP’s whom are merely working very hard protecting British values and British jobs.
There is no doubt the numbers speak for themselves in pure business terms. Indeed, action is required and will unfold.
However this is not solely about business, it is a company that is portrayed proudly as the British National Flag carrier.
What constitutes the title of “National Flag Carrier” and how to you quantify the benefits??
What part of the very core of BA today is actually British?
In my view the use of “British” does need tighter scrutiny and proportionate
influence/control from the British government as a cost for using our flag. This usage needs to be born in mind when criticising our elected MP’s whom are merely working very hard protecting British values and British jobs.
You really expect the Tory-backed Times to speak highly of unions - Unite in particular?
Just me who smells a rat? Of course, totally glad that only a few hundred pilot jobs have been cut and paycuts reduced to zero in the medium term, similar to the deal negotiated at RYR. How have we come from a place where there would need to extremely severe long term cuts, to this softer option? Was BAW's bluff called or are others in other departments now going to be shafted accordingly?
Just me who smells a rat? Of course, totally glad that only a few hundred pilot jobs have been cut and paycuts reduced to zero in the medium term, similar to the deal negotiated at RYR. How have we come from a place where there would need to extremely severe long term cuts, to this softer option? Was BAW's bluff called or are others in other departments now going to be shafted accordingly?
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Change the record Danny. Yes Pilot jobs are being cut as are cabin crew, ground, engineering, office, management. For god sake people need to accept that there will be redundancies as there have been across the entire GLOBE. I really don’t know what else can be said to the tunnel visioned people out there believing BA can afford to keep the same number of staff on the same salaries and with the same conditions.
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Survival Cot
It is a load of tripe; no one cares that BA isn’t British at the management core when they are expanding and doing well. It is only when times are hard and things change that it suddenly becomes an issue.
It is a load of tripe; no one cares that BA isn’t British at the management core when they are expanding and doing well. It is only when times are hard and things change that it suddenly becomes an issue.
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Sure it’s bad, with BA obviously the hardest hit.
When you are making 60-80% of the profit, and everything stops, you fall the furthest.
For anyone with short memories: IAG profits in the last few years, to compare with perhaps the worst economic situation in history that we are now experiencing.
2016: €2.48bn
2017: €3.01bn
2018: €3.23bn
2019: €3.29bn
Not forgetting: special dividend paid out in 2018 of €700m, and the saving from NAPS closure of c.£800m. in 2018, and €1bn spent in share buybacks.
When compared with these numbers, BA’s loss doesn’t seem so bad.
But it will probably worsen for the rest of 2020, especially with the way governments are behaving.
At least IAG Cargo is doing really well, with record revenue.
IAG is still looking at Air Europa, maybe for a reduced price.
There are over 150 potential vaccines in development according to National Geographic.
WW said we would not return to 2019 levels until 2023.
If true, then 2023 should be a bumper year.
We just have to get through 2020-2023 first.
When you are making 60-80% of the profit, and everything stops, you fall the furthest.
For anyone with short memories: IAG profits in the last few years, to compare with perhaps the worst economic situation in history that we are now experiencing.
2016: €2.48bn
2017: €3.01bn
2018: €3.23bn
2019: €3.29bn
Not forgetting: special dividend paid out in 2018 of €700m, and the saving from NAPS closure of c.£800m. in 2018, and €1bn spent in share buybacks.
When compared with these numbers, BA’s loss doesn’t seem so bad.
But it will probably worsen for the rest of 2020, especially with the way governments are behaving.
At least IAG Cargo is doing really well, with record revenue.
IAG is still looking at Air Europa, maybe for a reduced price.
There are over 150 potential vaccines in development according to National Geographic.
WW said we would not return to 2019 levels until 2023.
If true, then 2023 should be a bumper year.
We just have to get through 2020-2023 first.
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de minimus non curat lex
Going back 74 pages the title of this thread now looks rather optimistic, wouldn't be surprised if this costs 24000 jobs in the end, we are completely and utterly screwed (edited to add) at the moment with no obvious way that we can stem the huge losses in the near future.
Last edited by Max Angle; 1st Aug 2020 at 10:22.
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I wouldn't say screwed, but expect further pay cuts (Temporary hopefully) until a return to profitability.
I'm sure a process was agreed by BALPA if the financial situation was to deteriorate further.
I'm sure a process was agreed by BALPA if the financial situation was to deteriorate further.
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You are burying your head in the sand mate. The share price went down 6% yesterday from a really low base. This is institutions selling while they still have money left. The expectation of a good outcome is only speculative.
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The share price drop was due to the rights issue announcement.
This will probably be approved by shareholders in September.
Since we do not yet know the share-pricing for this, there is uncertainty causing the sell-off.
If they go for fair-value, say £2.50, the share price will likely rise to that level.
Qatar may have a say on the issue price since they are having 2 on the board, and may not wish to suffer too much dilution.
This will probably be approved by shareholders in September.
Since we do not yet know the share-pricing for this, there is uncertainty causing the sell-off.
If they go for fair-value, say £2.50, the share price will likely rise to that level.
Qatar may have a say on the issue price since they are having 2 on the board, and may not wish to suffer too much dilution.
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Rights issues sell shares at a discount and not a premium. If you're pinning hopes to a rights issue, that may raise 2 months of Cash, then you're in extreme trouble. The reliance on Qatar shows desperation. Air Italy were not allowed to increase flights to the US due to Qatari money.
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The rights issue has been mulled about for some time, maybe even when the price recently went above 350p, who knows.
Sure it will be at a discount at the time of announcement, then the actual share price will hover at that level.
I expect Qatar and others to pick up some IAG shares at bargain prices, with a longer-term view.
Current liquidity of €8.1 billion isn’t quite ‘desperation’.
Apparently, they have bridged loan facilities for a further year.
The rights issue will increase liquidity by a further c.€3bn.
And they still want to buy another airline?
Hardly ‘fighting for survival’ just yet.
Sure it will be at a discount at the time of announcement, then the actual share price will hover at that level.
I expect Qatar and others to pick up some IAG shares at bargain prices, with a longer-term view.
Current liquidity of €8.1 billion isn’t quite ‘desperation’.
Apparently, they have bridged loan facilities for a further year.
The rights issue will increase liquidity by a further c.€3bn.
And they still want to buy another airline?
Hardly ‘fighting for survival’ just yet.
