British Airways chief 'firmly believes' airlines could collapse amid coronavirus crisis

11 May 2020, 12:10

Willie Walsh gives evidence to the Commons Transport Committee on Monday
Willie Walsh gives evidence to the Commons Transport Committee on Monday. Picture: PA

By Megan White

British Airways chief Willie Walsh “firmly believes” some airlines could collapse amid the coronavirus crisis.

Mr Walsh, who is chief executive of the airline's parent company IAG, said he “wished every airline well” but said “not all of them” will come through the crisis, which has grounded flights worldwide.

The pandemic has forced many major airlines, including BA and Virgin Atlantic, to cut jobs as airlines are unable to operate.

Giving evidence to the Commons Transport Select Committee, Mr Walsh said: "I wish every airline well in the current environment.

"I hope to see many of them come through this.

"I firmly believe that not all of them will, because many of them were poorly run and quite honestly weren't viable in good times.

"I can't see how they would be viable with the changing environment we're all facing."

It was announced last month that BA would make up to 12,000 workers redundant after revenues plunged 13 per cent in the first quarter of 2020.

The company already has more than 22,000 UK staff using the government's furlough scheme, while most of its fleet has been grounded for weeks.

Mr Walsh spoke after it was announced Heathrow airport's passenger numbers were down 97 per cent year-on-year in April.

It said just 206,000 people travelled through the airport last month, which is "the same number it would typically serve in just one day".

Discussing the BA job cuts, Mr Walsh said: "The labour legislation in Ireland and Spain - the two other major countries in which we operate - it's different. We're required to do it in a different way.

"We are embarking on a restructuring and I've made it clear that this is group-wide restructuring. It's not specific to British Airways.

"It's group-wide restructuring in the face of the greatest crisis that the airline industry and the airlines within IAG have faced.

"It's not as you portray. We are not picking on British Airways.

"We're not doing anything that we don't think is absolutely necessary to secure the survival of British Airways, and we're doing exactly the same with the other airlines in the group, complying with the law as it is in the countries in which we operate."

He also denied that IAG is focused on investing in new aircraft, acquiring Austrian Airlines and putting rivals such as Virgin Atlantic out of business, rather than protecting jobs.

Mr Walsh said: "Talk of using relative strength to drive competitors out of business is total nonsense.

"I think you've got to realise, the airline industry is not functioning at the moment, we're not flying.

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"Our relative strength is the cash that we have which we're burning through until we can get to a position whereby we start flying again and start generating cash to shore up the liquidity.

"If we have to avail of the facilities that we have negotiated, it means we're taking on additional debt, which will make the future even more difficult for all of the airlines in the group given that that debt will have to be paid."

Last week, Virgin Atlantic announced they would stop flying services from London Gatwick and plan to cut over 3,000 jobs as part of a restructuring programme amid the crisis.

The airline is expecting to axe over 3,000 jobs - a 30 per cent cut - after a 45-day consultation and will remove all Boeing 747s from its fleet.

But it said it hopes to return to Gatwick "in line with customer demand" once the pandemic is over and travel bans are lifted.

Pilots union BALPA said 426 pilots were at risk of losing their jobs in the restructuring.

Ryanair is also cutting up to 3,000 jobs across pilots and cabin crew in a restructuring programme which could also involve unpaid leave and salaries being slashed by up to 20%, as well as the closure of a number of aircraft bases across Europe.