BA chief executive says airline is 'fighting for survival'

16 September 2020, 10:40 | Updated: 16 September 2020, 11:03

The boss of British Airways has said the company is "fighting for our own survival" during the coronavirus crisis.

BA chief executive Alex Cruz told the Commons' Transport Select Committee that the coronavirus pandemic is "the worst crisis for BA".

He said BA is burning through £20m in cash per day, and that he has taken a one-third pay cut.

"Covid has devastated our business, our sector, and we're still fighting for our own survival," he continued.

"Just to give you some figures as you asked. Last week, we flew approximately 187,000 passengers in the different flights we had in and out of the UK.

"The same week in the previous year, we flew just under a million passengers. So we are running between 25-30% of the normal flight schedule and this is six months into the pandemic.

"The relationship is very clear. Fewer passengers means fewer flights, and fewer flights means fewer people required to actually service them.

"As CEO of British Airways, I have to take responsibility. I cannot ignore the situation. I had to act incredibly fast."

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British Airways is among the airlines who have called for a test-and-quarantine pilot scheme on the world’s leading intercontinental air link, between London and New York.

The government says it is looking at such an approach but has previously insisted that there is no viable alternative to 14 days of self-isolation.

Mr Cruz also told the Transport Select Committee: "I deeply, deeply regret that way too many loyal and hardworking colleagues of mine are having to leave our business, and I understand why MPs are concerned.

"This is an impossible situation. We're having to make incredibly difficult decisions as a consequence of this pandemic and it is really only because of Covid-19 that we have had to go through such deep restructuring.

BA has been criticised after the company shed around 12,000 of the 42,000 staff it had at the start of the coronavirus pandemic and renegotiated contracts with the remainder.

He continued: "I have to make these difficult decisions at this time but I am completely dedicated and focused on protecting those nearly 30,000 jobs of those British Airways colleagues that will remain within the business.

"So in summary, the worst crisis for BA and still six months on, significantly fewer passengers actually travelling on a daily basis throughout the British Airways network."

Asked about whether he has "optimism for the coming months", Alex Cruz replied: "We remain worried with regards to the evolution of the rest of the winter season.

"We are encouraged by the potential decision to get slot relief throughout all European airports but the fact remains that people are still afraid of travelling.

"Of course we are having weekly changes, as you know, to the quarantine list. We don't have a testing solution yet. And still our customers are paying APD even just to fly on domestic regional flights.

"So the overall situation is quite challenging, and this is why we are taking every measure possible to make sure that we can actually make it through this winter, and that we can join the recovery hopefully into the next few years, in a way that we will be able to continue expanding our network and looking for ways to make it through all this negative impact.

"But once again, yes, we do not see a short-term coming back of our passengers. All the feedback that we get, all the data that we get, all the companies we speak with, all the consumer groups that we speak with, are still pointing at a slow recovery process."

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Mr Cruz told the committee British Airways held "very difficult and yet very constructive" meetings with pilots' union Balpa, which resulted in a package being agreed on job and pay cuts aimed at avoiding a larger number of redundancies.

But non-pilot unions "chose different paths and decided not to engage with us", the chief executive added.

He said the airline sent the unions "over 500 pages of proposals, ideas, potential mitigations" and invited them to more than 520 meetings which they did not attend.

But an agreement has been reached with the non-pilot unions - such as those representing cabin crew - and staff are being balloted.

Trade union Unite had accused the airline of planning a "fire and rehire" scheme involving remaining employees having their terms and conditions downgraded.

Mr Cruz said: "We have reached agreements, in principle, which will mean that there will be no need whatsoever to issue new contracts.

"It will just be using the standard methodology of the union agreement which makes some amendments to the existing contracts, and we hope that the majority of that process will finish this week."