IAG: BA restructuring may cost 12,000 jobs
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I struggle to see the future looking anything like we thought it would at the start of the year.
The need for business travel has drastically reduced and most people are doing things remotely that they would previously have done in person before.
The days of managers and directors travelling from London to LA 3 times a year for meetings are probably over, now they have got used to the idea of doing this over Zoom at no cost. The likes of Google used to book out half of Vegas for conferences and fly thousands of people in from all over the world. I can't see this happening again any time soon, but it may eventually return, perhaps. My O/H used to work in Berlin, flying out on Mon morning and returning to London on Thu night to WFH on Fri. This has long since stopped with no sign of ever resuming - she is doing everything from home.
The issue is basic economics for any large airline. Supply will massively outstrip demand for the forseeable future. Running at 20-30% capacity and losing £20 million a day is not sustainable.
Unless the confidence to travel can quickly be restored round 2 of compulsory redundancies is a virtual certainty. If they are operating on LIFO (which has to be done very carefully in order to be legal) then anyone with under 5 years on short-haul is probably 'in the zone'.
The need for business travel has drastically reduced and most people are doing things remotely that they would previously have done in person before.
The days of managers and directors travelling from London to LA 3 times a year for meetings are probably over, now they have got used to the idea of doing this over Zoom at no cost. The likes of Google used to book out half of Vegas for conferences and fly thousands of people in from all over the world. I can't see this happening again any time soon, but it may eventually return, perhaps. My O/H used to work in Berlin, flying out on Mon morning and returning to London on Thu night to WFH on Fri. This has long since stopped with no sign of ever resuming - she is doing everything from home.
The issue is basic economics for any large airline. Supply will massively outstrip demand for the forseeable future. Running at 20-30% capacity and losing £20 million a day is not sustainable.
Unless the confidence to travel can quickly be restored round 2 of compulsory redundancies is a virtual certainty. If they are operating on LIFO (which has to be done very carefully in order to be legal) then anyone with under 5 years on short-haul is probably 'in the zone'.
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A lot of business travel is for generating sales leads and meeting with customers. You simply don't risk missing out on a business deal worth 10k+ to save on a flight ticket. Your competition might view things differently and you will always lose out.
WFH will end up being the silent killer of our economy if we're not careful. The impact on small businesses in city centres is already causing concern and you can tell that the government's stance is changing.
WFH will end up being the silent killer of our economy if we're not careful. The impact on small businesses in city centres is already causing concern and you can tell that the government's stance is changing.
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You misunderstood. I’m just saying that they’ve not received the protections of LIFO in the MOA that listening to Balpa would have you believe have been upheld as part of the deal. There are several groups to which the “general principle of last in first out” from the MOA has been played fast and loose.
Sadly another bout of redundancy is a real possibility. The agreements made on the first round try to appease those with strong LIFO views resulting with employees directly paying for CRS & retraining costs. Neither of these initiatives feature in the MOA resulting in cost zero for the employer.
The root cause was an arrogant view that BA never makes pilots redundant. This attitude created a lack of a clear a written agreement/process hence the mess and infighting.
If there is further pressure on society as Covid bites even more, further redundancy without clarity of process is a real possibility. More infighting will no doubt ensue.
There is with any debate, pockets of animosity, hopefully isolated to the few, for me my focus is anything I can do for the vulnerable as this crisis deepens....
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Unless the confidence to travel can quickly be restored round 2 of compulsory redundancies is a virtual certainty. If they are operating on LIFO (which has to be done very carefully in order to be legal) then anyone with under 5 years on short-haul is probably 'in the zone'.
In short there can be absolutely zero confidence in how a theoretical Round 2 would play out. Are Balpa willing to sacrifice more pay for a bastardized version of Lifo again? We’ve taken a big hit to pay and ended up with junior pilots winning the fleet lottery (some with about a weeks service to the company when the crisis hit) being securely ring-fenced whilst mega senior SFOs on the Jumbo sit in peril in CRS. I know there were the very best of intentions behind it but was it good value trying to uphold the principle of LIFO (and paying handsomely for it) only to end up with that result?
Nobody at this point can predict what the outcome of Round 2 would be. Let’s hope and pray it doesn’t get there. As stated earlier, BA will be close to 1000 (Headcount Equivalent) off the books in 2021 compared to the beginning of 2020 pre crisis (using totals of planned retirements, VR, CR, CRS and PT). There comes a point with the economies of scale where the business cannot shrink and remain viable because it’s impossible to service the debt (see Norwegian). So the very viability of BA as a going concern is compromised if further hairdressing continues (ask a more clever accountant for the precise figure on that). But if the business doesn’t come back in short order the viability of the company is compromised for the more obvious reason. In short the company has bigger problems.
Last edited by RexBanner; 4th Sep 2020 at 11:24.
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A lot of business travel is for generating sales leads and meeting with customers. You simply don't risk missing out on a business deal worth 10k+ to save on a flight ticket. Your competition might view things differently and you will always lose out.
WFH will end up being the silent killer of our economy if we're not careful. The impact on small businesses in city centres is already causing concern and you can tell that the government's stance is changing.
WFH will end up being the silent killer of our economy if we're not careful. The impact on small businesses in city centres is already causing concern and you can tell that the government's stance is changing.
I can state that I have flown 40 long-haul flights a year, for many years, and NEVER EVER met a customer. This is for one of BA's Top 3 customers.
Not only that but customers aren't letting any Tom, Dick or Harry into their building. Plus their staff are working from home too.
This is rose-tinted specs, and far, far removed from the actualle.
Pax numbers should return by 2023 according to IATA, but RPKs will take until 2024 which indicates that people will be travelling shorter distances at first. Figures regarding the breakdown into F/C/Y would be interesting as well if they were available.
We can assume a general trade down so long haul becomes medium haul and business becomes economy, so whilst the numbers are there, the margins are greatly reduced.
Airlines which are heavily reliant on long haul premium traffic, such as EK and SQ will take the longest to recover. Airlines such as Ryanair, which have little exposure to the business traveler segment, will benefit from the general downgrade in spending, and also operate a fleet of smaller aircraft which are easier to fill. Utilisation is already maximised as they have no need to coordinate schedules to accommodate connections as it’s point to point.
Business travel will still take place but there will be less of it due to general belt tightening and some replacement by video conferencing. Expect the premium price over economy to be reduced as airlines discount to fill the seats for a few years.
We can assume a general trade down so long haul becomes medium haul and business becomes economy, so whilst the numbers are there, the margins are greatly reduced.
Airlines which are heavily reliant on long haul premium traffic, such as EK and SQ will take the longest to recover. Airlines such as Ryanair, which have little exposure to the business traveler segment, will benefit from the general downgrade in spending, and also operate a fleet of smaller aircraft which are easier to fill. Utilisation is already maximised as they have no need to coordinate schedules to accommodate connections as it’s point to point.
Business travel will still take place but there will be less of it due to general belt tightening and some replacement by video conferencing. Expect the premium price over economy to be reduced as airlines discount to fill the seats for a few years.
N4790P
interesting but what we are seeing here is international economy prices are increasing to reflect the general lack of choice. I hope your assessment is correct but somehow I doubt it!
Time will tell.
Time will tell.
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Just a few of my thoughts.
If a second round of CR's happen then I cannot see the remainder of the pilot workforce taking another large slice of their salaries to pay to save more jobs. BALPA can bleat all they like but the ball is firmly in BA's court and they will ultimately do what they want to do in the end.
If LIFO is used again than this will wipe out a lot of short haul pilots which the company will not want to see as it is the busiest fleet at the moment.
The problem for BA is the USA which is a huge part of its market. New York alone generates a billion dollars in revenues alone.
BA over the years has got rid of so many routes over the years( dozens) and have put all their eggs in one basket with the USA. BA flies some 50 times a week to California alone. The company got greedy in everything it did and no matter how hard the workforce worked it was never enough
BA also did not learn its lesson after 911 which forced the 747 classic out of the skies. Ultimately before Covid BA was running an ageing thirsty fleets of aircraft and this crisis has exposed this.
The Summer is over and I feel the next set of quarterly figures will make grim reading .
Apologies for being negative but personally I am struggling to see a way forward without some sort of government intervention and soon.
If a second round of CR's happen then I cannot see the remainder of the pilot workforce taking another large slice of their salaries to pay to save more jobs. BALPA can bleat all they like but the ball is firmly in BA's court and they will ultimately do what they want to do in the end.
If LIFO is used again than this will wipe out a lot of short haul pilots which the company will not want to see as it is the busiest fleet at the moment.
The problem for BA is the USA which is a huge part of its market. New York alone generates a billion dollars in revenues alone.
BA over the years has got rid of so many routes over the years( dozens) and have put all their eggs in one basket with the USA. BA flies some 50 times a week to California alone. The company got greedy in everything it did and no matter how hard the workforce worked it was never enough
BA also did not learn its lesson after 911 which forced the 747 classic out of the skies. Ultimately before Covid BA was running an ageing thirsty fleets of aircraft and this crisis has exposed this.
The Summer is over and I feel the next set of quarterly figures will make grim reading .
Apologies for being negative but personally I am struggling to see a way forward without some sort of government intervention and soon.
My pick is that round two will happen by the end of the year. I think it will be by seat and fleet as all the training courses to active fleets are now full from the supplementary bid and the CRS is already at the maximum size as stipulated by the company. The 787 and A350 will stay safe. The CRS pool will stay safe as they are already off BA's books. The B777, A380 pilots will suffer heavy losses, and the A320 fleet will suffer a haircut. I guess the company will re-use the same matrix again, but this time the matrix will be run several times, once for each seniority list (seat/fleet) - I get that this isn't LIFO any more. Anyone on the A380 or in the bottom 30% of their respective seniority lists of the B777 or A320 should be making plans in case my prediction is correct. (for clarity I am included in this)
This is all very much IMHO, purely guesswork. I truly hope I am wrong for my colleagues and myself! It'll be interesting to return to this post in 6 months time and score my predictions.
This is all very much IMHO, purely guesswork. I truly hope I am wrong for my colleagues and myself! It'll be interesting to return to this post in 6 months time and score my predictions.
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I thought this was a rumours and news network, not a platform for amateur guessing. Especially when the guessing is so depressing. Time to take a break from this place.
maybe my conjecture was misplaced. as you rightly point out it's neither rumour nor news. apologies for bringing the tone of the thread down even further! A break from this sort of forum is often a good idea!
But I really do believe that making a start on plan b in my (and presumably your) position would be a wise move.
But I really do believe that making a start on plan b in my (and presumably your) position would be a wise move.
It can’t hurt to have a plan B can it? All about planning ahead. I don’t see how BA will deal with up to 800? more 777/380 excess pilots without it being painful. If thinking about it helps them get ahead of the curve , then that would be a good thing.
I think one things for sure, if there’s a round 2 (and I can’t see how there won’t be at this point), BALPA will have very little input into the consultation this time.
I had plan B mapped out back in May. Plan C is in development.
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Shipping a coronavirus vaccine around the world will be the "largest transport challenge ever" according to the airline industry.
The equivalent of 8,000 Boeing 747s will be needed, the International Air Transport Association (IATA) has said.
There is no Covid-19 vaccine yet, but IATA is already working with airlines, airports, global health bodies and drug firms on a global airlift plan.
The distribution programme assumes only one dose per person is needed.
"Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry. But it won't happen without careful advance planning. And the time for that is now," said IATA's chief executive Alexandre de Juniac.
Have Ba been too quick to turn their 747 fleet into cans?
The equivalent of 8,000 Boeing 747s will be needed, the International Air Transport Association (IATA) has said.
There is no Covid-19 vaccine yet, but IATA is already working with airlines, airports, global health bodies and drug firms on a global airlift plan.
The distribution programme assumes only one dose per person is needed.
"Safely delivering Covid-19 vaccines will be the mission of the century for the global air cargo industry. But it won't happen without careful advance planning. And the time for that is now," said IATA's chief executive Alexandre de Juniac.
Have Ba been too quick to turn their 747 fleet into cans?
Do you honestly think there is limited long haul airliner/cargo capacity out there at present? A global airlift plan will be required, as it was for PPE, but the capacity is there, it just needs organised. BA won't be bringing back any 74s.
The major difficulty of mass distributing a vaccine is the public health infrastructure on the ground, not to mention the publics willingness to actually be vaccinated - not the distribution between countries.
The major difficulty of mass distributing a vaccine is the public health infrastructure on the ground, not to mention the publics willingness to actually be vaccinated - not the distribution between countries.
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There is no Covid-19 vaccine yet, but IATA is already working with airlines, airports, global health bodies and drug firms on a global airlift plan.
The distribution programme assumes only one dose per person is needed
The distribution programme assumes only one dose per person is needed
But that aside , most large countries have vaccine productions plants able to deliver enough for their local populations . ( i.e. China, India, Europe, USA, Japan , etc..) so the demand for air transport will be limited to smaller countries. and are likely to be a one-off run in a limited period of time . Do not really see the problem .
The major difficulty of mass distributing a vaccine is the public health infrastructure on the ground, not to mention the publics willingness to actually be vaccinated - not the distribution between countries.