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Welcome to London Air Travel’s Monday Briefing for the week beginning 8 June 2020.
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The UK’s Quarantine Regime Begins
There remains deep frustration and reciprocal incomprehension between all of BA, its trade unions and the government.
The UK’s mandatory quarantine regime on passengers arriving in the UK came into force at midnight. As you can see from official guidance the self-isolation regime is very stringent. Those who must self-isolate cannot leave their home at all, not even to go shopping or to exercise.
Willie Walsh said an interview with Sky News on Friday that the move was disproportionate, irrational, and would “torpedo” its recovery plans.
According to today’s Daily Telegraph, Home Office officials have conceded privately that the regime is not workable in practice. Home Secretary Priti Patel will take questions on the quarantine regime in the House of Commons at 14:30 today.
BA has already delayed again the planned resumption of flights at London City to 21 July and London Gatwick to 1 August. BA’s transatlantic joint-business partner American Airlines has also pushed back the resumption of many routes from London Heathrow until early August.
Heathrow Airport CEO John Holland-Kaye has also told City AM that it could cut a third of its jobs if the quarantine is not lifted.
This is at the same time, according to reports in the Sunday papers, a group of government ministers known as the “save summer six”, are pressing for industries to reopen as quickly as possible.
IAG, easyJet and Ryanair are considering legal action against the government and have sent a “pre-action” letter. This would be way of a judicial review. These cases are not easily won. It would focus on how the government reached its decision, which IAG says was done without consultation, rather than the scientific basis for the quarantine.
A separate organisation representing 500 hospitality businesses known as “Quash Quarantine”, advised by the very effective former Director of Communications at Virgin Atlantic, Paul Charles, may join this action.
BA Braces For A Showdown With Trade Unions
The 45 day consultation on redundancies at BA is due to end next Monday, 15 June.
There remains no progress between BA and both the GMB and Unite who represent cabin crew, engineers and ground staff.
Unite seems particularly riled at BA issuing a notice under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 to trigger a formal consultation on redundancies, rather than discussing voluntary redundancies first.
However, BA points to a employment tribunal case brought by Unite on behalf of a number of former employees of Monarch Aircraft Engineering which found in their favour because a Section 188 notice was not issued.
With the current impasse, it seems inevitable this will end up in court at some point. If the GMB and Unite maintain their current positions, they are going to have to explain why they have wilfully ignored a formal consultation process which is expressly provided for in trade union relations legislation.
There had been signs of progress between BA and its pilots union BALPA.
It appears that BALPA had been able to mitigate the impact of redundancies with voluntary redundancy packages and pilots being able to pursue opportunities outside the airline until demand returns.
This appears to have taken a step backwards as last Wednesday BA issued, to the great frustration of BALPA, an additional Section 188 notice for further redundancies with the number of pilots at risk of redundancy increased from 955 to 1080. This has consternation amongst BALPA’s leadership.
The second notice also includes a notice that if an agreement is not reached, remaining pilots would be rehired by the airline on new terms and conditions. This is a threat facing other groups of staff, which Willie Walsh described in a letter to MPs as “vastly exaggerated and also mischaracterised as decisions that have already been made”.
There are some aspects of BALPA’s existing agreement with BA that are considered sacrosanct, specifically the “scope clause”. Also known as Schedule K, this states that BA aircraft with more than 100 seats and all BA flights at Gatwick and Heathrow must be operated with BA mainline pilots.
BA seems to have been wrong-footed by the political response to redundancies, particularly as it has taken advantage of the government’s payroll protection scheme for furloughed staff.
There is clearly frustration on IAG’s part that the scale of the crisis facing aviation is not understood. IAG is reported to have written to MPs twice last week.
It won’t be known for some months whether the redundancies announced by BA, easyJet and Virgin Atlantic are merely the start of a very substantial increase in unemployment across a number of sectors in the UK.
In terms of where things go from here, historically, it’s always been BA’s approach to ultimately reach an agreement with trade unions, on the basis it has to maintain a long-term relationship with them. This is even when negotiations have become very protracted and some unions have tested the patience of the rest of the airline to the limit.
Also of note this week:
In an interview with Politico, Airbus CEO Guillaume Faury says that relations with some airlines have become strained as they seek to renege on contractual commitments to take delivery of aircraft “This is the moment where you see what the relationship means.” (Politico)
Michael Trestl, Head of Network Management at SWISS answers questions on network planning during the Coronavirus pandemic. (SWISS)
The Business Rescue Practitioners of South African Airways are due to publish their business rescue plan today. A draft plan, which envisages a new airline backed by the South African government, has already been leaked.
What’s it like to live in an empty hotel during lockdown? ” It’s not quite The Shining, it’s more like Home Alone.” (BBC News)
Late post publication updates:
[Reserved for updates throughout the day]
Malaysia Airlines plans to resume flights from London Heathrow to Kuala Lumpur in July. Services will operate twice weekly. The airline is gradually increasing domestic and international flights and expects to return to a normal schedule in October.
Qantas has ended twice weekly flights from London Heathrow to Perth as the Australian Federal government has stopped providing financial support for these flights. (Sydney Morning Herald)
The Business Rescue Practitioners of South African Airways have asked a further delay to the publication of their business rescue plan following objections by trade unions. (South African Broadcasting Corporation)
Austrian Airways has secured a €600m bailout package from the Austrian Federal Government and Lufthansa. This includes €150m in state aid, an equity injection of €150m by Lufthansa and a €300m bank loan, 90% of which will be guaranteed by the Austrian Government. As a condition of this, Austrian has made certain environmental commitments. Its employees will also contribute €300m through salary cuts. Contracts with suppliers will also be renegotiated. (Austrian Airways)
Air New Zealand plans to return to a near-normal domestic route network as the New Zealand COVID-19 alert level has fallen to 1. The majority of its domestic lounges have reopened. The airline expects to operate at 55% of its normal domestic capacity in July and August. International flying will remain extremely limited. (Air New Zealand)
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