British Airways owner IAG has been accused by trade union Unite of using the Covid-19 crisis as cover to slash jobs after losing €1.3 billion on fuel hedging.
In a statement released on Thursday the UK’s largest trade union claimed the carrier had made a “massive error” in its forward buying of aviation fuel.
And it criticised the carrier for planning to axe 12,000 roles when it was making use of a £300 million coronavirus corporate loan provided by the Bank of England.
Oliver Richardson, Unite national officer for civil air transport, said: “It is clear that hardworking BA employees are expected to pay with their jobs for a crisis not of their making and IAG’s massive wrong call on fuel hedging which notched up a €1.3bn loss.
“There is also a sour taste in the mouth that IAG has accessed a £300 million loan and taken government money from the job retention scheme (JRS), both of which are underpinned by the UK taxpayer, while announcing that it was planning to axe 12,000 BA jobs and force the rest of the workforce to accept inferior contracts or face dismissal.
“The abrupt announcement of these job losses and the attack on the remaining workforce are a mark of shame for this iconic UK company. BA is rushing through these job cuts, while, cynically, planning for recovery to start as soon as July.
“These actions go well beyond any economic response to the Covid-19 crisis, and are about a cynical and opportunistic attempt to make everyone else pay for their past mistakes and contribute more in the future to their profits.”
IAG has said it plans a “meaningful return to service” from July after being battered by the Covid-19 crisis but warned it does not expect the level of passenger demand in 2019 to recover before 2023 and capacity for this year will be 50% below pre-coronavirus levels.
IT has also announced a group-wide restructuring measures will be “essential” and it expects to defer deliveries of 68 aircraft.
The company, which also owns Aer Lingus, Iberia and Vueling, reported a first quarter loss after tax of €556 million against a €70 million profit in the same period last year.
Total operating losses after €1.32 billion of exceptional charges for fuel and foreign exchange hedges came to €1.86 billion.
The group warned that the second quarter will be “significantly worse” with capacity slashed by 94% from late March.
Chief exeutive Willie Walsh said: “We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world.
“The industry will adapt to new requirements in the same way that it has adapted to developments in security requirements in the past.
“However, we do not expect passenger demand to recover to the level of 2019 before 2023 at the earliest.
“This means group-wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity. We intend to come out of the crisis as a stronger group.”
