British Airways is set to slash up to 12,000 jobs as part of a restructuring plan forced on the carrier by the fallout from the novel coronavirus, its parent company IAG said on Tuesday.
The firm said its plans were still under consultation but it was “likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000”.
Passenger demand would take “several years” to return to 2019 levels, it added.
International Airlines Group (IAG), which also owns Iberia and Vueling, saw its shares lose 2.2 percent as preliminary results showed first quarter revenue had fallen by 13 percent to 4.6 billion euros ($4.9 billion).
The group’s operating result before exceptional items came in at a loss of 535 million euros, compared with a profit of 135 million last year, with the second quarter expected to be worse.
IAG said it had reduced passenger capacity for April and May by 94 percent compared with the same period last year.
BA chief executive Alex Cruz had warned last month there would be consequences for the airline after the coronavirus pandemic devastated demand.
Recent weeks have seen the carrier, which has some 4,500 pilots and 16,000 cabin crew, only operating flights for essential travel and repatriation of tourists marooned abroad.
British Airways is set to make 12,000 of its 45,000 strong workforce redundant – 26 per cent of the headcount – its parent IAG said. The airline, privatised in February 1987, has already furloughed nearly 23,000 staff. https://t.co/DmiD4YsLp2
— Ian Fraser (@Ian_Fraser) April 28, 2020
Weighing further on the group was an exceptional 1.3 billion euro charge resulting, it said Tuesday, from the “ineffectiveness” of its fuel and foreign currency hedges for the remainder of the year.
IAG, which said detailed first quarter results would be released on May 7, added its January-February operating result was similar to that period of 2019, despite the suspension of flights to China from the end of January as the virus impacted there.
The group repeated its February guidance that “given the uncertainty on the impact and duration of COVID-19, IAG is not currently providing profit guidance for 2020” as a whole.
“However, the Group expects its operating loss in the second quarter to be significantly worse than in the first quarter,” given the virus fallout, Chief Financial Officer Stephen Gunning said in the statement.