Category Archives: IAG

IAG reports six months of financial results

IAG released this financial report for the first half of 2021:

IAG to power 10% of its flights with sustainable fuel by 2030

International Airlines Group (IAG) has become the first European airline group to commit to powering 10 percent of its flights with sustainable aviation fuel by 2030.

The Group will purchase one million tons of sustainable jet fuel per year enabling it to cut its annual emissions by two million tonnes by 2030. This equates to removing one million cars from Europe’s roads each year.

In addition, IAG will become the first airline group worldwide to extend its net zero commitment to its supply chain. The Group will be working with its suppliers to enable them to commit to achieving net zero emissions by 2050 for the products and services they provide to IAG.

With the right policy in place in the next ten years up to 14 plants could be built across the UK, creating 6,500 jobs and saving 3.6 million tonnes of CO2 per annum. Sustainable jet fuel produces at least 70 percent less carbon emissions than fossil fuel.

IAG is investing US$400 million in the development of sustainable aviation fuel in the next 20 years. The Group is partnering with sustainable aviation fuel developers, LanzaJet and Velocys. This includes Europe’s first household waste-to-jet fuel plant in the UK which will start operations in 2025. British Airways will also purchase sustainable jet fuel from LanzaJet’s US plant to power some of its flights from late 2022.

IAG was the first airline group worldwide to commit to net zero carbon emissions by 2050 and is one of the 10 global companies recognized by the UN for their ambitious carbon targets.

The Group is investing in tech innovator ZeroAvia to speed up the development of hydrogen-electric powered aircraft. This type of technology has the potential to enable IAG airlines to reach zero emissions on short-haul routes by 2050.

IAG reports a 2020 loss of €6,923 million

International Consolidated Airlines Group (IAG) on February 26, 2021 presented Group consolidated results for the year to December 31, 2020.

COVID-19 situation and management actions:

• Passenger capacity in quarter 4 was 26.6 per cent of 2019 and for the full year was 33.5 per cent of 2019 and continues to be adversely affected by the COVID-19 pandemic, together with government restrictions and quarantine requirements

• Current passenger capacity plans for quarter 1, 2021 are for around 20 per cent of 2019 capacity, but remain uncertain and subject to review

• 969 cargo-only flights operated in quarter 4 • Additional funding of €3.4 billion secured in quarter 4, including £2.0 billion commitment from UK Export Finance finalized in February 2021 and $1.0 billion EETC for British Airways, $0.2 billion sales and leaseback transactions for Iberia and €150 million for Aer Lingus backed by the Ireland Strategic Investment Fund (ISIF), with €0.8 billion bridge financing facilities repaid

• 2020 capex reduced by €2.3 billion, from plans at the start of the year, to €1.9 billion, with €0.5 billion due to seven aircraft deliveries delayed from Q4-20 into 2021; 2021 capex expected to be lower than 2020

• British Airways reached agreement to defer €495 million of pension contributions due between September 2020 and October 2021

• British Airways reached agreement in principle over restructuring plans for cargo employees, following agreement with the other main British Airways employee groups earlier in 2020 • Group continues to focus on cost reduction, increasing the variability of its cost-base and liquidity initiatives

IAG period highlights on results:

• Fourth quarter operating loss €1,471 million (2019: operating profit €93 million), and operating loss before exceptional items €1,165 million (2019: operating profit before exceptional items €765 million)

• Operating loss for the year to December 31, 2020 €7,426 million (2019: operating profit €2,613 million), and operating loss before exceptional items €4,365 million (2019: operating profit before exceptional items €3,285 million)

• Exceptional charge before tax in the year to December 31, 2020 of €3,061 million on discontinuance of fuel and foreign exchange hedge accounting, impairment of fleet and restructuring costs; exceptional charge before tax for quarter 4 €306 million

• Loss after tax and exceptional items for the year to December 31, 2020 €6,923 million (2019: profit €1,715 million) and loss after tax before exceptional items: €4,325 million (2019: profit before exceptional items €2,387 million)

• Cash of €5,917 million at December 31, 2020 down €766 million on December 31, 2019. Committed and undrawn general and aircraft facilities were €2.14 billion, bringing total liquidity to €8.1 billion. Including €2.2 billion proceeds from the UK Export Finance (UKEF) gives total pro-forma liquidity of €10.3 billion.

Luis Gallego, IAG’s Chief Executive Officer, said: “In 2020, we’re reporting an operating loss of €4,365 million before exceptional items compared to an operating profit of €3,285 million in 2019. Total operating losses including exceptional items relating to fuel and currency hedges, early fleet retirement plus restructuring costs came to €7,426 million.

“Our results reflect the serious impact that COVID-19 has had on our business. We have taken effective action to preserve cash, boost liquidity and reduce our cost base. Despite this crisis, our liquidity remains strong. At 31 December, the Group’s liquidity was €10.3 billion including a successful €2.7 billion capital increase and £2 billion loan commitment from UKEF. This is higher than at the start of the pandemic.

“In 2020, our capacity decreased by 66.5 per cent while our non-fuel costs went down 37.1 per cent thanks to the extraordinary effort across our business. The Group continues to reduce its cost base and increase the proportion of variable costs to better match market demand. We’re transforming our business to ensure we emerge in a stronger competitive position.

“IAG Cargo’s turnover increased by almost €200 million to €1.3 billion. Cargo helped to make longhaul passenger flights viable. In addition, we operated 4,003 cargo-only flights in the year.

“I would like to thank our employees across the Group for their remarkable commitment, resilience and flexibility through this crisis. They have adapted quickly to new ways of working and made big sacrifices in terms of salary and working time. Our people have played a central role in all we have achieved during these challenging times.

“The aviation industry stands with governments in putting public health at the top of the agenda. Getting people traveling again will require a clear roadmap for unwinding current restrictions when the time is right.

“We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction. We’re calling for international common testing standards and the introduction of digital health passes to reopen our skies safely.”

IAG to buy Air Europa for half the previously agreed price

IAG reinforced its leadership positions in its home markets of London, Madrid, Barcelona, Dublin and Rome with the addition of 48 new routes.

Our routes

The Group portfolio consists of unique operating companies, from full service longhaul to low-cost shorthaul carriers, each targeting specific customer needs and geographies.

Aer Lingus

During 2018, Aer Lingus continued to profitably grow its North American and European networks. Growth was focussed on its North American network, with new routes launched from Dublin to Philadelphia and Seattle.

British Airways

British Airways operates the most comprehensive network between Europe and North America. Following new route announcements to Pittsburgh and Charleston, soon they will serve 34 destinations, consolidating their position as the largest longhaul carrier into North America by points served. They had great success in opening routes to markets such as Austin, New Orleans and Nashville and will look for further opportunities in the US. As they develop the longhaul network further, their relationship with joint business partners will remain critical in offering customers better frequency and easier connections in the markets they serve. 2019 will see them launch new services to Islamabad and Osaka as we continue to expand their presence elsewhere in the world.

Find out more

Iberia

Iberia increased overall capacity by 7 per cent with expansion across its network. In longhaul it launched services to San Francisco. A major milestone was reached in its efforts to build a strategic alliance with LATAM, with the Chilean Free Competition Defence Court approving their proposed joint business. Iberia used Iberia Express to strengthen its network, adding four new destinations.

Find out more

LEVEL

The LEVEL brand was selected as the brand to launch IAG’s new shorthaul operations from Vienna, operating 14 shorthaul routes to a mix of European destinations including London, Paris, Barcelona, Ibiza, Milan, Larnaca and Dubrovnik. Longhaul LEVEL services also launched from Paris to the French Caribbean, Montreal and New York.

Find out more

Vueling

Vueling strengthened its positions in key markets by 3 points of market share in Barcelona and Spain-Canaries and 4 points in Spain-Balearics. We also maintained capacity discipline and flexibility to quickly adjust to future headwinds.

Find out more

Air Europa aircraft photo gallery:

Air Europa aircraft slide show:

IAG reports its preliminary third quarter results and update

International Airlines Group (IAG) announces its preliminary results for the third quarter of 2020 and capacity outlook for the fourth quarter.

Third quarter results

Total revenue declined by 83 percent to €1.2 billion compared to €7.3 billion last year. Operating result before exceptional items was a €1.3 billion loss compared to a €1.4 billion profit last year.

Passenger capacity, expressed in available seat kilometres, declined by 78.6 percent in the quarter. Passenger traffic, measured in terms of revenue passenger kilometres, declined by 88.0 per cent. Seat load factor declined by 38.8 points to 48.9 per cent.

Current trading and capacity outlook

On September 10, 2020, IAG announced a reduction in capacity from -74 percent to -78 percent in 3Q 2020 and from -46 percent to -60 percent in 4Q 2020 as a result of the leveling off of bookings following the reintroduction of quarantine requirements by many European governments.

Recent overall bookings have not developed as previously expected due to additional measures implemented by many European governments in response to a second wave of COVID-19 infections, including an increase in local lockdowns and extension of quarantine requirements to travellers from an increasing number of countries. At the same time, initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure testing and air corridor arrangements, have not been adopted by governments as quickly as anticipated.

In response to the high uncertainty of the current environment, IAG now plans for capacity in 4Q 2020 to be no more than 30 per cent compared to 2019. As a result, the Group no longer expects to reach breakeven in terms of Net cash flows from operating activities during 4Q 2020.

Liquidity

Liquidity remains strong. As at 30 September 2020, the Group had total liquidity of €6.6 billion, comprised of €5.0 billion of cash, cash equivalents and interest-bearing deposits and €1.6 billion of undrawn and committed general and aircraft facilities. In addition, €2.74 billion of gross proceeds from the Capital Increase were received in early October for a total pro-forma liquidity of €9.3 billion.

Detailed results for the third quarter will be released as planned on 30 October, accompanied by a presentation and conference call for analysts and investors.

Stephen Gunning Chief Financial Officer

British Airways retires the Airbus A318, Iberia to retire the A340-600 as IAG reports first half results

Iberia Airbus A340-642 EC-JPU (msn 744) KBP (Robbie Shaw). Image: 950772.

International Consolidated Airlines (IAG) today (July 31, 2020) presented Group consolidated results for the six months to June 30, 2020.

The results for the six months were significantly impacted by the outbreak of COVID-19, which has had a devastating impact on the global airline and travel sectors, particularly from late February 2020 onwards.

COVID-19 situation and management actions:

  •   Most Group aircraft grounded in quarter 2, with small programme of passenger flights for essential travel and repatriation
  •   1,875 additional cargo flights operated in quarter 2 to transport critical equipment and essential supplies
  •   Additional operating procedures implemented to protect customers and staff including facemask use and additional cleaning
  •   Liquidity boosted by actions including accessing Spain’s Instituto de Crédito Oficial (ICO) facility and UK’s Coronavirus Corporate Finance Facility (CCFF). Also, British Airways’ Revolving Credit Facility extended and additional one-year bridge aircraft financing facilities agreed and implemented in quarter 2
  •   Multi-year renewal signed with American Express on July 24, including €830 million payment, a significant part of which is Avios pre-purchase
  •   Cash operating costs for quarter 2 reduced to €205 million per week, with April and May slightly lower than previously estimated at €195 million per week, despite additional cost of operating cargo-only flights
  •   Current capacity planning scenario for an increase through quarter 3 and quarter 4, to -74 percent and -46 percent versus 2019 respectively, but plans highly uncertain and subject to easing lockdowns and travel restrictions
  •   Based on our current capacity planning scenario, IAG would reach breakeven in terms of Net cash flows from operating activities during quarter 4 2020
  •   Government wage support schemes accessed in main employee bases and other measures agreed to reduce employee costs due to much-reduced flying program
  •   Capital spending for 2020 reduced by €1.5 billion, against the original plan, with 2020 fleet capital expenditure covered by committed financing
  •   Deliveries of 68 new aircraft due in 2020 to 2022 deferred and certain legacy aircraft retired early, including 32 Boeing 747s and 15 Airbus A340-600s
  •   IAG expects it will take until at least 2023 for passenger demand to recover to 2019 levels and is restructuring its cost-base to reduce each airline’s size, with consultations being undertaken locally as required
  •   Active discussions remain ongoing with Globalia regarding a potential restructuring of the Air Europa acquisition, taking into account the impact of the COVID-19 pandemic. Any agreed transaction would remain subject to regulatory clearances IAG period highlights on results:
  •   Passenger capacity operated in quarter 2 down 95.3 per cent on 2019 and for the six months down 56.2 percent on 2019
  •   Second quarter operating loss €1,365 million before exceptional items (2019 operating profit: €960 million) Note: Iberia is currently operating 3 A340-600s to Latin America: EC-IZY, ECJLE and EC-JNQ.
  •   Operating loss before exceptional items for the half year €1,900 million (2019 operating profit: €1,095 million)
  •   Exceptional charge in the half year of €2,137 million on derecognition of fuel and foreign exchange hedges for 2020 and impairment of fleet
  •   Loss after tax before exceptional items for the half year €1,965 million, and 2020 statutory loss after tax and exceptional items: €3,806 million (2019 profit: €806 million)
  •   Cash of €6,016 million at June 30, 2020 down €667 million on December 31, 2019. Committed and undrawn general and aircraft facilities were €2.1 billion, bringing total liquidity to €8.1 billionProposed capital increase:

 Proposed capital increase of up to €2.75 billion, to be supported by irrevocable commitment from largest shareholder and underwritten, subject to approval at General Shareholders’ Meeting in September

For definitions refer to the Alternative performance measures section.
1 The 2019 results include a reclassification of the costs the Group incurs in relation to compensation for flight delays and cancellations as a deduction from revenue as opposed to an operating expense. There is no change in operating profit. The amount reclassified for the period to June 30, 2019 was €63 million. Further information is given in note 1.
2 The prior year comparative is December 31, 2019.

Willie Walsh, IAG Chief Executive Officer, said:

“In quarter 2 we’re reporting a record operating loss of €1,365 million before exceptional items compared to an operating profit of €960 million last year. Total operating losses including exceptional items relating to the early retirement of British Airways’ Boeing 747s and Iberia’s Airbus A340s came to €2,177 million.

“We operated 1,875 cargo-only flights using passenger aircraft in quarter 2 which was an important cash contributor to the Group.

“All IAG airlines made substantial losses. As a result of government travel restrictions, quarter 2 passenger traffic fell by 98.4 per cent on a capacity reduction in the quarter of 95.3 per cent. We have seen evidence that demand recovers when government restrictions are lifted. Our airlines have put in place measures to provide additional reassurance to their customers and employees on board and at the airport.

“We continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels. Each airline has taken actions to adjust their business and reduce their cost base to reflect forecast demand in their markets not just to get through this crisis but to ensure they remain competitive in a structurally changed industry.

“IAG continues to take action to strengthen its balance sheet and liquidity position including more than halving its operating cash costs and significantly reducing its capital spending. At the end of June liquidity stood at €8.1 billion. Based on our current capacity planning scenario, we would reach breakeven in terms of Net cash flows from operating activities during quarter 4 2020.

“Subject to shareholder approval at our AGM on September 8, IAG will undertake a capital increase of up to €2.75 billion which will enhance the Group’s resilience, balance sheet and liquidity position. We’re delighted that our largest shareholder, Qatar Airways, has already committed to support the proposed capital raising. This will best position IAG to continue executing its strategic objectives and capitalise on its existing market leading position and future growth and consolidation opportunities.”

In other news, British Airways has decided to drop the London (City) – New York Airbus A318 business route. The 32-seat A318s will be retired immediately. The unique route was last revenue flight was operated on March 18, 2020 (BA2 JFK-LCY with G-EUNA).

Video:

Top Copyright Photo: Iberia Airbus A340-642 EC-JPU (msn 744) KBP (Robbie Shaw). Image: 950772.

Iberia aircraft slide show:

 

IAG Group reports on the first quarter

International Consolidated Airlines Group (IAG) today (May 7, 2020) presented Group consolidated results for the three months to March 31, 2020.

The results for the quarter were significantly impacted by the outbreak of COVID-19, which has had a devastating impact on the global airline and travel sectors, with the spread of the virus worldwide, resulting in lockdowns and travel restrictions and advisories, particularly from late February 2020 onwards.

COVID-19 situation and management actions:

  •   Passenger capacity has been reduced by 94 percent from late March with most aircraft grounded and those retained for operating limited passenger, repatriation and cargo-only flights being appropriately-sized and new-generation, where practical
  •   Going into the crisis, IAG had a strong balance sheet and liquidity, with cash and undrawn facilities at 31st March of €9.5 billion and at 30th April increasing to €10.0 billion
  •   Actions have been taken to boost liquidity, such as accessing the UK’s Coronavirus Corporate Finance Facility (CCFF) and Spain’s Instituto de Crédito Oficial (‘ICO’) facility and extending British Airways’ Revolving Credit Facility
  •   For April and May the normal run-rate cash operating costs have been reduced from €440 million per week to €200 million per week
  •   Capital spending for 2020 has been reduced by €1.2 billion, with most of the remaining €3.0 billion covered by committed and agreed financing
  •   IAG is planning a meaningful return to service in July with a planning scenario that could see an overall reduction in passenger capacity of c.50 per cent in 2020, but these plans are highly uncertain and subject to the easing of lockdowns and travel restrictions
  •   IAG expects that its second quarter will be significantly worse than the first quarter
  •   IAG does not expect the level of passenger demand in 2019 to recover before 2023, making further Group-wide restructuring measures essential; as a result IAG expects to defer deliveries of 68 aircraft
  •   As previously announced, and required by UK labour legislation, British Airways has formally notified its trade unions about a proposed restructuring and redundancy program which is subject to consultation

    IAG period highlights on results:

  •   Capacity operated in the quarter down 10.5 percent on 2019
  •   First quarter operating loss before exceptional items €535 million (2019: €135 million operating profit)
  •   Net foreign exchange operating result impact for the quarter adverse €68 million
  •   Exceptional charge in the quarter of €1,325 million on derecognition of fuel and foreign exchange hedges for 2020
  •   Loss after tax before exceptional items for the quarter €556 million (2020 statutory loss after tax and exceptional items:

    €1,683 million, 2019 profit: €70 million)

  •   Cash of €6,945 million at March 31, 2020 was up €262 million on December 31, 2019

For definitions refer to the IAG Annual report and accounts 2019.
1 March 31, 2019 comparatives are the Group’s restated statutory results as reported. The 2019 results have been restated to reclassify the costs the Group incurs in relation to compensation for flight delays and cancellations as a deduction from revenue as opposed to an operating expense. There is no change in operating profit. The amount reclassified for the period to March 31, 2019 was €23 million. Further information is given in the IAG Annual report and accounts 2019.
2 The prior year comparative is December 31, 2019

Willie Walsh, IAG Chief Executive Officer, said:

“In quarter 1 we’re reporting a substantial operating loss of €535 million before exceptional items compared to an operating profit of €135 million last year. Total operating losses including exceptional items relating to fuel and foreign currency hedges came to €1,860 million.

“The operating result up to the end of February was in line with a year ago. However, March’s performance was severely affected by government travel restrictions due to the rapid spread of COVID-19 which significantly impacted demand. Most of the loss in the quarter occurred in the last two weeks of March.

“We had a strong balance sheet and liquidity position coming into this crisis. We are taking all appropriate actions to preserve cash, reduce and defer both capital spending and operating costs and secure additional financing in order to strengthen and maintain our liquidity. At the end of April our liquidity stood at €10.0 billion.

“We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world. We will adapt our operating procedures to ensure our customers and our people are properly protected in this new environment. We are working with the various regulatory bodies and are confident that changes in regulations will enable a safe and organised return to service. The industry will adapt to new requirements in the same way that it has adapted to developments in security requirements in the past.

“However, we do not expect passenger demand to recover to the level of 2019 before 2023 at the earliest. This means Group- wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity. We intend to come out of the crisis as a stronger Group.”

Trading outlook

As announced on February 28, 2020, given the uncertainty on the impact and duration of COVID-19, IAG is not currently providing profit guidance for 2020. However, as announced on 28th April, the Group expects its operating loss before exceptional items in the second quarter to be significantly worse than in the first quarter, given the substantial decline in passenger capacity and traffic and despite some relief on employee costs from government wage support schemes and various management actions.

British Airways plans to cup up to 12,000 jobs due to the drop in air travel

IAG, the parent of British Airways, reported its first quarter results:

International Airlines Group (IAG) has announced its preliminary results for the first quarter of 2020 and continues to assess further cost reduction and cash flow initiatives across the entire Group. British Airways is to consult over redundancy and restructuring proposals with its trade unions.

First quarter results

Total revenue declined by 13 percent to €4.6 billion compared to €5.3 billion in the prior year period. Operating result before exceptional items was a loss of €535 million compared to a profit of €135 million last year. In addition, IAG’s pre-tax profit was impacted by an exceptional charge of €1.3 billion resulting from the ineffectiveness of its fuel and foreign currency hedges for the rest of 2020 due to over-hedging. This exceptional charge is measured as at the quarter end date. Detailed results for the first quarter will be released as planned on 7 May, accompanied by a presentation and conference call for analysts and investors.

The operating result in the first two months of 2020 was similar to that of last year, despite the suspension of flights to China due to COVID-19 from the end of January. All of the reduction in the operating result in the quarter compared to last year came in March. The majority of the reduction in IAG’s operating result was incurred by British Airways, followed by Iberia and Aer Lingus, while Vueling experienced a modest increase in operating loss.

Capacity

Passenger capacity, expressed in terms of available seat kilometres, declined by 10.5 percent in the quarter. Passenger traffic in terms of revenue passenger kilometres declined by 15.2 percent in the quarter. Seat load factor for the quarter declined by 4.3 points to 76.4 per cent.

IAG has reduced passenger capacity in April and May by 94 percent compared to last year, only operating flights for essential travel and repatriation. Between March 22 and April 26 IAG Cargo undertook around 350 additional cargo only return flights, primarily on long-haul routes with passenger wide body aircraft. Passenger capacity from June will depend on the timing of the easing of lockdowns and travel restrictions by governments around the world.

British Airways redundancy consultation

In light of the impact of COVID-19 on current operations and the expectation that the recovery of passenger demand to 2019 levels will take several years, British Airways is formally notifying its trade unions about a proposed restructuring and redundancy program. The proposals remain subject to consultation but it is likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000 of them.

As previously announced, British Airways has availed itself of the UK’s COVID-19 Job Retention Scheme and furloughed 22,626 employees in April.

Outlook

As announced on 28 February 2020, given the uncertainty on the impact and duration of COVID-19, IAG is not currently providing profit guidance for 2020. However, the Group expects its operating loss in the second quarter to be significantly worse than in the first quarter, given the substantial decline in passenger capacity and traffic and despite some relief on employee costs from government job retention and wage support schemes.

Total cash and undrawn general and committed aircraft finance facilities amounted to €9.5 billion at the end of March, including €6.95 billion of cash, cash equivalents and interest-bearing deposits.

Recovery to the level of passenger demand in 2019 is expected to take several years, necessitating Group-wide restructuring measures.

British Airways also made this announcement:

Letter to colleagues from Alex Cruz, Chairman and CEO at British Airways

On April 27, British Airways flew just a handful of aircraft out of Heathrow. On a normal day we would fly more than 300. What we are facing as an airline, like so many other businesses up and down the country, is that there is no ‘normal’ any longer.

The global aviation body, IATA, has said that the industry has never seen a downturn this deep before, and that full year industry passenger revenues could plummet 55% compared to 2019, while traffic falls 48%.  Many airlines have grounded all of their planes. Sadly, we will see some airlines go out of business with the resulting job losses.

Our very limited flying schedule means that revenues are not coming into our business. We are taking every possible action to conserve cash, which will help us to weather the storm in the short-term. We are working closely with partners and suppliers to discuss repayment terms; we are re-negotiating contracts where possible; and we are considering all the options for our current and future aircraft fleet. All of these actions alone are not enough.

In the last few weeks, the outlook for the aviation industry has worsened further and we must take action now. We are a strong, well-managed business that has faced into, and overcome, many crises in our hundred-year history. We must overcome this crisis ourselves, too.

There  is no Government bailout standing by for BA and we cannot expect the taxpayer to offset salaries indefinitely. Any money we borrow now will only be short-term and will not address the longer-term challenges we will face.

We do not know when countries will reopen their borders or when the lockdowns will lift, and so we have to reimagine and reshape our airline and create a new future for our people, our customers and the destinations we serve. We have informed the Government and the Trade Unions of our proposals to consult over a number of changes, including possible reductions in headcount. We will begin a period of consultation, during which we will work with the Trade Unions to protect as many jobs as possible. Your views matter and we will listen to all practical proposals.

The scale of this challenge requires substantial change so we are in a competitive and resilient position, not just to address the immediate Covid-19 pandemic, but also to withstand any longer-term reductions in customer demand, economic shocks or other events that could affect us. However challenging this is, the longer we delay difficult decisions, the fewer options will be open to us.

I want to pay tribute to the thousands of British Airways colleagues who are playing a vital role in the global response to the Covid-19 crisis. Whether you are supporting our repatriation flights or the transport of essential cargo; or one of the hundreds of colleagues volunteering with organisations such as the NHS, you have my sincere respect and thanks.

This has been a difficult message to write and one I never thought I would need to send. I know how tight-knit the BA family is, and how concerned you will be, not just for yourself but for your colleagues, too. We must act decisively now to ensure that British Airways has a strong future and continues connecting Britain with the world, and the world with Britain.

Thank you.

Alex

BALPA had this reaction:

BALPA General Secretary, Brian Strutton said:

“BA pilots and all staff are devastated by the announcement of up to 12,000 possible job losses in British Airways.

“This has come as a bolt out of the blue from an airline that said it was wealthy enough to weather the COVID storm and declined any Government support.

“BALPA does not accept that a case has been made for these job losses and we will be fighting to save every single one.”
More from the BBC.

British Airways aircraft photo gallery (Airbus):

IAG further reduces capacity by 90% and accesses job retention and wage support schemes

IAG has made this announcement:

International Airlines Group (IAG) continues to take every action to reduce operating expenses and improve cash flow.

On March 16, 2020, IAG announced that it would reduce capacity, expressed in terms of available seat kilometers, by at least 75 percent in April and May compared to the same period in 2019. In recent weeks, IAG’s airlines have been helping to repatriate customers throughout the world and to conduct cargo flights delivering vital medical equipment and supplies, food and other products to combat COVID-19 and keep global supply chains moving.

Following a review, IAG has decided to reduce capacity further to an approximately 90 percent reduction in April and May compared to last year.

British Airways accesses UK Job Retention Scheme

As a result of the significant decline in flying, British Airways is making use of the UK’s COVID-19 Job Retention Scheme to help UK-based employees placed on furlough. It has today reached agreement with trade unions, GMB and Unite, to apply this scheme to more than 30,000 cabin crew and ground-based employees in April and May. Under this scheme, furloughed employees will receive 80 per cent of their base pay and of certain allowances. This agreement is subject to union ratification.

British Airways has also reached agreement with its 4,000 pilots to take four weeks of unpaid leave in April and May.

IAG’s other airlines have received support from similar job retention and wage support schemes for more than 17,000 employees in Spain and are seeking similar support in Ireland.

Stephen Gunning
Chief Financial Officer
April 2, 2020

British Airways aircraft photo gallery (Airbus):