Record losses cannot be sustained without action, says BA owner

The chief executive of British Airways’ owner IAG has warned record losses cannot be sustained as he defended cutbacks to the airline.

Speaking to Sky News’ Ian King Live programme, Willie Walsh stressed the unprecedented challenge posed by the coronavirus pandemic and warned it was “going to involve pain for everybody”.

He was speaking as IAG, which also owns Iberia and Aer Lingus, reported an operating loss of €1.4bn (£1.3bn) euros for the second quarter.

The aviation industry globally has been devastated by the halt to flying caused by the COVID-19 crisis, forcing tens of thousands of redundancies, state bailouts and the collapse of some carriers.

The gradual return to operations, needed to salvage airline’s peak summer season when they make most of their profits, has also been threatened by a resurgence of coronavirus cases in some popular holiday destinations such as Spain and France.

British Airways has warned it needs to slash 12,000 jobs and plans to change the contracts of its remaining 30,000 staff, including pay cuts.

This has provoked a furious reaction from the cabin crew union Unite, which has threatened strike action.

Mr Walsh said: “I am not going to deny that pay cuts are part of the proposal, but we have put in place a plan that would limit the pay cut to 20% so there are actions being taken to soften the blow.

“I recognise it is a serious blow. This is a really worrying time for everybody. We want people to work with us and we want to get through this and remove the uncertainty as quickly as we can.

“But it is going to involve pain for everybody. It’s not just about cabin crew it’s about everybody in the airline and we want to make sure we can back to flying our customers, doing what we do best, as quickly as we can, but doing it in a way that will guarantee our future.

“That’s absolutely critical. We cannot sustain the level of losses that we are sustaining at the moment. Our business just cannot support those level of losses so we do have to change for the future.”

“This isn’t just about British Airways. Every company that you talk to is facing some sort of challenge as we go through this. And I think for many the challenge is actually going to get worse.

“We are not through the peak of this, there is a lot more to go. It’s going o be a very tough time and the more we work with one another and the more we support one another the better for everybody.”

Mr Walsh pointed out the scale of the challenge “goes way beyond” anything experienced in the wake of the 9/11 terror attacks and the 2008 financial crash.

He said: “This is an absolute necessity.

“Anyone who argues that this is opportunism, or that we don’t need to do this or this can be addressed through temporary measures seriously underestimates the scale of the challenge that the industry is facing.

“We need to take action, not just to survive through this crisis but to make sure we can secure the maximum number of jobs possible in the business going forward.”

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