The fallout from the 9/11 terror attacks in 2001 was a “doddle” for the airline industry compared to the impact on the sector from the Covid-19 pandemic.
The comment came from Willie Walsh, chief executive of British Airways parent company International Airlines Group, amid a downturn which has seen thousands of job cuts by airlines, ground handlers and travel companies.
‘The worst is yet to come’
“The deepest crisis the industry has ever faced” will deepen further, Walsh warned.
“The worst is yet to come. People will survive this initial crisis but next year is going to be really tough, because some airlines are surviving on the back of support they’re getting and they’re not recognising the scale of the change – and they’re hoping things will recover quickly, when I don’t believe they will: 2021 is going to be the toughest year ever for the industry and 2022 is going to be really challenging,” he told The Sunday Times in a wide-ranging interview.
BA, which says it does not expect the market to return properly until 2023, has furloughed 23,000 staff and tapped the Bank of England for a £300 million loan.
The unprecedented conditions explain the harsh reshaping of the airline’s workforce being planned.
He said that without the redundancies and changes to employment terms, there would be “no BA” left.
Walsh added: “At some point you run out of cash.
“It’s as serious as this: people talked about BA facing the risk of going out of business back in 2001 [after the terrorist attacks in the US].
“Well, 2001 was a doddle compared with this. Post-9/11 was a really challenging environment — globally, passenger traffic fell in October 2001 by about 18%. We’ve seen passenger traffic fall globally by 55%.
“It doesn’t matter how strong your balance sheet was when you came into this. If you’re spending money and not generating any revenues, eventually you’re going to lose all your reserves.”
Walsh defended BA’s record in paying refunds for cancelled flights and apologised for the delays.
“I know it’s very frustrating for them [customers], but we’ve never had to deal with this scale of refunds,” he said.
“The last stat I saw from BA was they had refunded over 96% of customers who had asked, so that’s about 1.3 million people. It’s not as simple as some might expect.
“There’s also been a misunderstanding on the part of some customers where they believed they were entitled to a cash refund when they weren’t, and I can see how that is frustrating.
“I know it’s been difficult, but I reject any suggestion that we’re not providing cash refunds to people who are entitled to them.”