British Airways CEO Alex Cruz has strongly criticised the Transport Select Committee for singling out the airline in its report on the impact of COVID-19 on the airline industry.
The Transport Select Committee had branded the airline a “national disgrace” and accused it of using the COVID-19 pandemic as a cover for making wholesale changes to employee terms and conditions.
In a video intended for BA staff and obtained by ITV News, Alex Cruz describes the report as “not based on fact” and “based on rumours and emotions” that “fails to grasp the economics of our airline industry”. He also criticises a “misinformation campaign” by “outsiders” which has caused alarm amongst BA staff.
Alex Crux also confirms in the video that the airline is burning through £20m of cash a day.
As reported, BA has taken on new debt and mortgaged aircraft. Alex also confirmed that, as reported by the London Evening Standard, it is selling art from its lounges.
BA does not expect a return to normal schedules during the summer due to the the UK’s mandatory 14 day quarantine regime.
A number of routes worldwide will be suspended. It is also reviewing its fleet plans which may result in whole aircraft types (most likely the Boeing 747, and possibly the Airbus A380) earlier than planned.
To date, Unite and the GMB have refused to meet with the BA unless it withdraws the Section 188 notices it issued to notify its trade unions of potential redundancies. Unite had argued it should explore other options such as voluntary redundancies before issuing these notices.
BA has always maintained that it has to issue these notices to comply with its legal obligations. The proposals it has set out are intended to cover all possible scenarios, including the absolute worst case, for consultation. A suggestion that it intends to “fire and rehire” employees on new terms and conditions had caused considerable alarm and lobbying of MPs.
The minimum 45 day consultation period under the Section 188 notices issued on 30 April has expired today, Monday 15 June. According to the video, BA does not yet plan to make staff redundant. However, Alex confirms that it will continue to issue administrative notices required by law as it plans to continue to restructure parts of its business.
Alex Cruz Video Transcript
The full transcript of the video obtained by ITV News is below:
We all want our airline to be flying again. Despite our best efforts, it seems unlikely that we will be carrying many holidaymakers this summer.
The government’s decision to introduce 14 days’ quarantine for visitors arriving into the UK, without consultation or scientific evidence, has dealt a hammer blow to our restart plans. It’s irrational to discourage people travelling to the UK from countries with a lower risk of infection.
I assure you that we’re doing all we can to force a policy change, including mounting a legal challenge in partnership with EasyJet and Ryanair.
Some have doubted the seriousness of the pandemic for our industry. And yet, every airline agrees, we must act decisively if we are to weather the storm and compete in the future.
But if you were to listen to some of our parliamentarians or certain trade unions our urgent efforts to adapt and survive are irresponsible.
The Transport Select Committee report published this weekend is not based on facts. It is based on rumours and emotions and it fails to grasp the economics of our airline industry.
Rather than singling out our British Airways, we would prefer parliamentarians to work with our industry, and with us to survive this crisis.
Right now, British Airways is burning around £20 million every day. That’s £600 million every month. Do not be fooled into believing that our cash reserves, or IAG’s cash reserves, will see us through. They will not.
We have taken on hundreds of millions of pounds of new debt, most of which must be repaid in the short term as early as next April. We have mortgaged dozens of our aircraft. We have been even selling the art from our lounge walls in our efforts to raise funds.
We will keep looking for any means possible to improve our cash position. We are redesigning our destination network. And we’re going to stop flying to a number of cities around the world, cities that we love dearly.
We are redesigning our fleet, and we are going to retire older aircraft. The situation is so serious that we may retire entire fleets earlier than planned. And we must redesign our business too.
So we can compete in a very different industry. I’ve said all of this to you before. It all bears repeating. The problem will not go away if we do not act. In fact, it will get worse.
Tomorrow [Monday 15 June] marks day 45 of the consultation for most colleagues, including those of you working as cabin crew, pilots and in Heathrow.
A misinformation campaign has led many of you to believe that tomorrow is the end of the road. It is not. There will be no redundancies tomorrow. I am angered on your behalf. There’s so much anxiety has been caused by outsiders, who do not truly care about British Airways, telling you that everything is over.
I have never said that jobs will not be lost. But we will not reach the point of redundancies until we have exhausted every option to save as many jobs as possible.
Unite and GMB have said publicly that they will only meet if we withdraw the Section 188 notices that set out our redundancy proposals.
For the record, if a UK company proposes redundancies, it must follow the law, inform the unions that jobs are at risk, and provide any and all information to make the consultation meaningful.
Our Section 188 notices are not notice of dismissals. Rather, they outline every item that could possibly be consulted on. The union representatives are smart, experienced people. I know that would bring good practical ideas to the table that we could explore together.
I received a message from Len McCluskey of Unite late last week, and I hope this signals the beginning of a dialogue. I am available at any time of the day or night for a meeting.
We’re entering a new phase of this process, during which we will start to implement some of the changes needed to secure our future. In accordance with the law we will continue making the necessary administrative filings that disclose all the possible outcomes of our proposals, which must include worst case scenarios.
I urge you not to be distracted by some of the soundbites from the paperwork in the days ahead. They will be taken out of context by those who wish to alarm you. What matters is that British Airways remains fully committed to saving as many jobs as possible.
A final thought. I know that some of you have been working tirelessly over the last few weekends and bank holidays, to make sure that we deal in the best way possible with this crisis. Thank you very much for your work. It is of great value.
Like other CEOs of companies facing job losses, I do not want to deprive anyone of their livelihoods. It is painful to contemplate the scale of the change we need to make because they know, we have the best people in the airline business. The most kind, caring and compassionate people who deliver a unique British Airways service.
I will do everything in my power to ensure that British Airways can survive and sustain the maximum number of jobs in line with the new reality of the airline industry and the severely weakened global economy. This is perhaps the very worst time in our history, but my leadership team and I will not give up on you.