London Air Travel’s Monday Briefing – 25 May 2020

Welcome to London Air Travel’s weekly briefing on air travel around the world, as published every Monday at 06:00 BST.

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British Airways Pilots & Cabin Crew
British Airways Pilots & Cabin Crew (Image Credit: British Airways)

Welcome to London Air Travel’s Monday Briefing for the week beginning 25 May 2020.

BA’s War Of Words With Trade Unions

A war of words has broken out between BA and its trade unions over planned redundancies and changes to staff terms and conditions.

On Friday, BA CEO Alex Cruz sent a message to staff which was leaked to the Financial Times. According to this, BA is having “productive conversations” with its pilots union BALPA. It is also claimed that representatives from GMB and Unite, who represent cabin crew and ground staff, have not attended any meetings with the airline.

“Consultation is so important, and productive conversations are already being held with Balpa. I am sorry that neither Unite nor GMB have attended any of the daily meetings they are invited to so that they can provide ideas and input into any of the other proposed changes, and maximise the number of jobs saved.”

Unite claims the consultation is a sham and has instead chosen to run a public campaign against the airline accusing it of betrayal.

Taken at face value, this appears to be worrying for BA staff who are caught between the two sides.

The unions’ strongest leverage at the moment is the repeated and on the record comments by IAG CEO Willie Walsh to its investors and MPs that it will engage in a “genuine and meaningful” consultation “with a view to reaching an agreement” in accordance with legislation on labour relations.

History has shown that BA and its trade unions can sometimes, against all expectations and far more often than they are given credit for, achieve a lot behind closed doors.

History has also shown that when there is a mandate for change from the top of the airline stonewalling doesn’t work and change will be imposed. BA will also sit out any negative publicity.

It is possible that this, like previous incidences where BA has imposed change when talks with unions break down, could result in litigation. Whilst there are “optics” and political scrutiny surrounding this, the consultation process BA has initiated is a formal legal one. If this does go to court, it will focus on the adherence of all sides to the legal process and not what IAG would term “the noise”.

Virgin Raises Funds To Support Virgin Atlantic

Virgin Group has raised $366m by selling down part of its stake in Virgin Galactic. It will retain a 40% stake in the space tourism business.

The proceeds will be used to support Virgin branded businesses. There’s been little news on potential new investors in Virgin Atlantic. Meanwhile, according to Sky News, lenders to the airline have appointed the professional services firm Deloitte to advise on their financial exposure to the airline.

On the question of state support for airlines, today’s Financial Times reports that the Chancellor of the Exchequer Rishi Sunak has agreed to a state bailout plan to save, in exceptional circumstances, “strategically important” companies whose failure would “disproportionately harm the economy” and are “viable companies which have exhausted all options” including existing government loan schemes.

This may pave the way for state support for airlines that are unable to qualify for existing government support schemes.

Sir Stelios Presses On

Sir Stelios Haji-Ioannou is undeterred having failed to oust four easyJet directors last Friday.

Sir Stelios has alleged that there were voting irregularities which could have affected the result. He is also pressing on with a campaign to encourage whistle blowers to come forward with information on alleged irregularities in connection with the order for new aircraft from Airbus.

Even if this comes to nothing, it may not be the end of the rancour between Sir Stelios and easyJet.

easyJet licences its brand name from Sir Stelios. Full details are on the easyJet website. The two sides have previously reached an out of court settlement over disputes in relation to the licence. easyJet agreed a new licence agreement in December 2010 for 50 years and a minimum term of ten years, which conveniently expires later this year.

Other News In Brief

Sir Tim Clark has scotched speculation that it plans to retire some of its Airbus A380 fleet early. Emirates plans to have most of its existing A380 fleet in service by the summer of 2022.

The charity Dreamflight, which charters a BA Boeing 747 aircraft to take children with a serious illness or disability on a once in a lifetime trip to Orlando, Florida will not operate a flight this year due to COVID-19.

Comair, which operates a BA franchise in Africa, is to publish a business rescue plan for approval by its creditors in early June. The airline is expected to resume flying in the autumn after the business rescue process has completed.

The New York Times Marks 100,000 US COVID-19 Deaths

Yesterday, the New York Times produced a powerful front page with details of 1,000 people who have died from COVID-19 in the US, collected from obituaries in local newspapers.

You see the interactive version on the New York Times website. Here are some extracts for people who died from COVID-19 and have worked in the field of aviation:

“Richard Passman, 94, Silver Spring, Md., rocket engineer in the early days of supersonic flight”

“Douglas Alan Roberts, 69, Vancouver, Wash – authority on aviation”

“Clair Dunlap, 89, Washington, pilot still teaching people to fly at 88”

“Viraf Darukhanawala, 77, Hoffman Estates, Ill, worker at O’Hare International Airport”

Late post publication updates:

[Reserved for updates throughout the day]

Lufthansa has secured a state bailout from the German federal government’s Economic Stabilisation Fund. The total value of the support package is €9 billion. In exchange, the government is to acquire a minority stake in Deutsche Lufthansa AG. This will be effected by way of a capital increase and is subject to the approval of Lufthansa shareholders. The support package includes a syndicated credit facility of €3 billion. As a condition of the support package, there are restrictions on dividend payments and management remuneration. The government will also take two seats on its supervisory board. The overall package is subject to approval from the European Commission. (Lufthansa)

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