Alex Cruz, Chairman and CEO of British Airways, spent an uncomfortable 2+ hours on Wednesday morning before the UK’s Transport Select Committee to discuss the implications of the Coronavirus pandemic on the airline and aviation industry.
Updating MPs, Cruz described the current situation as “the worst crisis British Airways has ever gone through in its 100-year old history,” claiming “COVID has devastated our business, our sector, and we are still fighting for our own survival.” The airline is burning through £20 million a day.
In line with the expectations of parent group IAG, Cruz warned it will take at least until 2023 for passenger demand to recover to 2019 levels. The airline has faced widespread criticism for its so-called ‘fire and rehire’ approach to the introduction of new contracts for its cabin and ground crew, a move Cruz said was now off the table following consultations and agreements with trade unions.
“The relationship is very clear. Fewer passengers means fewer flights, and fewer flights means fewer people required to actually service them,” he said.
The airline is in the process of reducing headcount by up to 13,000. By the end of August, the headcount was reduced by 8,236 due to employees leaving the business and mostly as a result of voluntary redundancy. The focus on survival has put a halt to the carrier’s multi-billion investment programme, which has seen improvements to the customer experience including new onboard services, cabin upgrades and lounge enhancements.
With winter approaching and this ‘deep crisis’ showing no sign of improving, survival is the name of the game for all in the aviation industry – directly or indirectly involved.