Leaders of trade union Unite have briefed City analysts on British Airways’ “high risk gamble” in cutting 12,000 jobs and seeking to fire and rehire much of the remaining workforce.
Unite said its officials met with more than 35 analysts on Friday (June 19) to warn the restructuring would damage BA’s brand and revenues.
The union said BA parent IAG’s cost cutting “is putting the airline’s market power and customer base at risk”.
It claims IAG “has not accounted for or communicated the risks involved to investors”.
BA is nearing the end of a staff consultation on 12,000 job losses and is seeking to persuade remaining staff, in particular cabin crew on older contracts, to sign up to vastly reduced pay and conditions.
The transport select committee of MPs condemned BA’s behaviour as “a national disgrace” in a report published a week ago.
In a statement, Unite said: “BA has maintained market power due to political tolerance of its anti-competitive position as a legacy flag carrier.
“Losing goodwill with regulatory authorities would present a significant risk to its market dominance and its revenue premium.”
In addition, it argued: “BA is risking the loss of its key customer base. Cost-cutting puts long-standing customer relationships at risk.”
Unite executive officer Sharon Graham described BA’s plan to fire and rehire staff as “a high risk gamble”.
She said: “British Airways is putting its market power and its loyal customer base at risk by adopting a scorched earth approach.
“The airline is in need of short-term financial support not permanent cuts to terms and conditions. BA has not accounted for inevitable losses as a result of their actions, or communicated the risks involved to investors.
“There are clear alternative solutions that BA is just not taking.”
Graham pointed out Akbar Al Baker, chief executive of Qatar Airways, pledged this week to make funds available to IAG if required.
Al Baker said in an interview with Sky News: “If necessary we will inject equity into IAG because it is a long-term investment from Qatar Airways.”
Qatar Airways owns a 25% stake in IAG, making it the group’s largest single investor.
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