Let me state a few things from the get-go.
- I’ve been a big fan of the direction British Airways was moving in for the last two years, and was actually one of the few who supported it as I saw change (slowly) making a (big) difference.
- I actually think Alex Cruz is one of the smartest people in the airline industry, and made tough choices to create long term viability for a large workforce, which would be smaller without his leadership.
- I absolutely agree that every airline must terminate a percentage of its workforce. No one on earth is saying travel will rebound 100% for years to come, and that means measures must be undertaken to ensure the success and viability of an airline for the future.
None of these things account for whatever is happening at British Airways right now, nor does it account for the lazy op-ed from Alex Cruz, which fails to draw any moisture from the tear ducts, while raising great concerns.
For a start, British Airways currently benefits from the UK Job Retention Scheme (JRS), which has been extended until October. The airline refuses to consider the possibility of keeping employees on during this interim period of government support, despite enjoying the financial benefits.
Mr. Cruz is quick to cite years of dwindling demand ahead, but considering the world hadn’t even heard of covid-19 in December, and grim projections were more than 10x worse than actual realities around the world today, it’s hard to understand why the airline won’t even consider the dynamic nature of this fast paced world.
Take Spain, for example, which previously hinted at remaining closed off to the world through 2020, but will now open to most of Europe in just a weeks time, with even broader entry from July 1st. It’s certain that the airline business won’t be the same, but it’s not all doom and gloom, nor may it be as bad as forecast.
It’s one thing to terminate a portion of staff, which virtually every airline has, or will soon do, but it’s another thing to make life a living hell for those which do get the “pleasure” of remaining.
If anything, one might rightly think that protecting the livelihoods of those deemed “worth saving” would be more essential than ever right now, so as to have employees who feel even more grateful and proud to be at work, not marginalized and more stressed than ever as to whether their wage can provide a decent life, beyond young uni student standards.
Some corporate soundbite type could tell me that all employees should take pride in their work no matter what, and they likely will, but they’re rarely the people who are being asked to scrape the barrel of meager pay on worse off working terms. In reality, most never have. Making that point even more concisely, the financial pain certainly isn’t being felt around the IAG, BA Executive teams, and even if someone like Mr. Cruz, or Mr. Walsh were to go a year without any compensation, it’s a lot easier when you’ve made millions in recent years.
And lets not forget the old “giving up their salary” chestnut. For an executive, salary compensation can often equate to less than 10% of overall take home pay. People working under these mercurial figures will undoubtedly be professional, but professional and proud are two very different things.
The latter (proud) can make all the difference as consumers become more educated and flexible in who they fly with, and why they choose who they choose.
Some people are even keeping sh*t lists of who wronged them with things like refunds, vouchers during covid-19. Somewhere at BA, an executive made the choice to have their IT department code their website so as to remove the option of a refund, which took manual work to do. Perhaps that’s why they won’t be asked to take a haircut on pay?
Those corporate contracts British Airways relied on aren’t going to be nearly as generous as they were, and there will be many airlines fighting to take even a half a percentage off. British Airways can solve its people problem by reducing head count, which no one would hold against them, and that’s the fundamental thing people don’t get. It’s the moves to negatively impact employees which aren’t terminate that are seen as opportunistic.
British Airways would love to start fresh, under the loose, almost lawless governmental and employment terms of some foreign competition, where workers have no rights, protections or virtually anything in their favor. That makes sense financially, but there’s an equilibrium between financial performance desires and the livelihoods of those which represent a given brand.
As someone who spends the majority of their time – under normal circumstances – observing the demeanor of travel industry employees, there’s a notable difference in those collecting a pay check, and those proud of their employer, no matter what the person insisting on the cost cuts says to justify them.
As noted, I’ve been a big Alex Cruz fan. I understand the unpopularity of removing “free” things from short haul flights, and I even wrote a viral letter berating him for the move, for which I admitted to be wrong. But over time, statistical analysis proved that Mr. Cruz was in the right.
Over 90% of travelers book based on price, and this allowed the airline to compete better on smaller margins. His interest in technology, from biometric boarding to kitted out new seats and facilities at Heathrow have made a positive impact, no doubt. For those that don’t know, Mr. Cruz was extremely early in unharnessing the power of the internet for the benefit of airline booking, and this isn’t his first rodeo.
I can only hope that the direction he’s steering is at the behest of his boss, Willie Walsh, because I’ll unfortunately think of him in less of a positive light, if it’s not.
This letter of his… my goodness. Not once in the letter, an op-ed published in the Mail On Sunday by the man Alex Cruz himself, specify why we should care about British Airways, or even want them to succeed.
What if travel does rebound at a better rate than hoped? These aren’t questions IAG or British Airways are willing to entertain, because they go against the deep seeded desire to cut costs, at any cost.
Alex Cruz is absolutely right about the balls up from the UK Government in regards to an idiotic quarantine, and I support BA and others suing the government for lack of consultation. His point to the fact that fewer planes are flying is of course true as well, but not once is there a clear reason as to why reducing the viability and livelihoods of staff which will remain on the workforce is genuinely necessary.
Cut headcount numbers, sure, Virgin is, EasyJet is, Ryanair is, Qantas is, United is…. but this is more than that.
He’s absolutely wrong about most of the rest. He’s mad at the idea of unions, MP’s and media (like myself) who entertain the threat of taking away slots, or bad mouthing the treatment of staff, but offers no justification as to why British Airways should retain the slots, or why diminishing quality of life for lifelong employees is needed, when virtually every other airline is simply reducing head count.
He went as far as to say that Parliament, which recently called the airline a “national disgrace” are operating solely on emotion, rather than fact, yet Mr. Cruz offers no statistics or facts of any kind in the piece. When it comes to the livelihoods of fellow humankind, particularly when attempting to recover from a health crisis, some level of emotional is only human.
Before British Airways became a private company, owned by a Spanish conglomerate that’s 25% owned by Qatar Airways, the British public and its government did everything to make the flag carrier ultra competitive, and that’s why the company enjoys virtually everything it has today. It wasn’t from private investment, big risks and aviation innovation but rather from a government creating – and protecting – a national brand.
Almost all the airlines slots which give British Airways a 51% monopology at Heathrow, the world’s most premium airport, were gifts from the UK over decades as a public entity, not purchases by the shrewd minds at IAG, guiding a privatized airline. If you gave me planes, and 51% of the slots at any major airport in the world, I’d like to think I could find a way to stay competitive.
Furthermore, awarded slots which were intended to connect the UK were converted from routes that benefited the UK public, like connecting regional airports, to those which created the greatest international profit centers once the company became private, including more than $1bn in revenue between just New York JFK and London Heathrow alone, annually. Well, at least last year…
If the airline isn’t offering the best service, or prices in any cabin, nor is it taking care of its own employees in the time of a global pandemic, why should it – a private company with few ties to the UK other than employment – actually benefit from the gifts of the British public?
I definitely side with BA/Alex on this issue.
He was dealt a terrible hand – on purpose, by his government and the world leaders who decided to do something awful. They were successful in halting the world for almost 3 months.
That has a cost. A real, human cost.
Hundreds of millions of lives are going to be hurt, millions will be ruined.
Because of a calculate move by the government that has, quite clearly, backfired.
—
He is being honest about what that will do, and what it will require for him to get the airline back into fighting shape.
Would people be happier if he said ‘everything is fine, everyone will keep their jobs, and we have no problems?’
He’s being honest, candid and he’s pushing hard to save the airline.
I don’t know what else you can ask for?
Being empathetic here, or apologizing here doesn’t help.
We need cold, calculating people to get us out of this malaise.
We need a lot more Alex’s and a lot less politicians if we want a society again.
Maybe the politicians can all volunteer their life savings to the employees of BA for forcing layoffs?
Or, will they just complain in public while business leaders scramble to fix everything the government ruined?
—
I’m 100% behind Alex here, the world needs more straight talk like this.
You’re a fucking idiot who clearly hasn’t seen the numbers in profit that BA contributes to IAG. Whilst the other so called ‘contributor airlines’ profits combined accounts for less than half of what BA brings in. And at the same time as they take this action, IAG pushes through a £1BN purchase of another airline. Which Willie ‘the liar’ Walsh says is being carried out at Iberia level using the held aggregated money of IAG. (Which BA contributed to in the tune of around 68% of total IAG profit.) Only to be proven that it’s a lie because in IAG’s annual report it clearly states IAG will be carrying out said purchase. And yet you have the sheer fucking audacity to sit there and type the absolute shit you did. You’re either on another fucking planet or you’re actually Alex Cruz using a different name to post and make it look like someone actually agrees with you. (Not one fucking person agrees with your bullshit Alex). In which case let me be completely honest with you……..You have turned BA, what was once a great airline, into a low cost laughing stock. (IT failures, strikes, customer data confidentiality breaches, the race to bottom to turn BA into a Low Cost Carrier). The only saving grace is the staff that you are now fucking over.
The way BA is exploiting a global emergency as an excuse to treat its employees like disposable rubbish is disgraceful and non justifiable. It’s the behavior of a tyrant. I do understand cutting heads will be a necessity, but reducing salaries by 60% is not. People’s lives are at stakes, their homes and their families. And those same people In return won’t be able to support local shops and economy (let alone repay eventual mortgages).If a sacrifice has to be made, meaning paycuts, everyone within the company should contribute equally and proportionately, and it should be for a fixed period of time only. A temporary, say, 5% or even 10% paycut from the lowest paid cleaner to the top manager level? Fair. Making pay front line workers only for something that is not under anyone’s control and indefinetly even, is not fair at all.
If you pay peanuts, you get peanuts. And if I wanted to fly low cost, I would book a ticket with a low cost airline.
As it is, I prefer solid and reliable companies, but BA seems to be going in the opposite direction for which they are losing at least me as a customer.
Probably worth pointing out that (a) no one at BA has has seen where the changes will end up or what the final offers from the company will be and (b) in many areas, the changes will result in improvements to the so called ‘newer contracts’ (pretty much anyone who joined since 2011).
The proposals for changes seen so far were BAs opening bid expecting the unions to push back – which they refused. I expect the leadership at BA is doing everything they can to save as many jobs as possible. The consultations will probably continue for a few weeks yet.
As for slots – the reality is simple, fly the slots or loose them – if BA shrinks by as much as 25-30% it will end up giving up slots somewhere.
BA management have said it’s a better contract for MF but the figures say otherwise. In most cases most will be working much harder, will be earning 2-3k less (by mixed fleet pay scales), have terms in their contracts to stand them down unpaid for months at a time to indefinitely plus potentially losing the short time down route they get. Many feel the potential changes to rostering practices are not only punitive pay wise but highly dangerous and could result in exponential cases of fatigue and potentially accidents and unsafe practices. No one is in any doubt the aviation world is changing, but we do ask that staff are treated with some dignity, and honesty. After all BA is one of the most profitable airlines in the world with Billions! In the bank.
https://www.change.org/Vote_Of_No_Confidence
I’ve been pretty critical of the whole IAG philosophy of turning British Airways into an ULCC. If they just decided to go the Frontier Airlines route and publicly announce they were doing so, I’d be saddened but would accept the change. What I have problems accepting is the pretense that BA is both a LCC and a premium airline. That inherently makes employees schizophrenic, constantly switching from intentionally awful customer service to top notch service and back again. Pick one and stick with it.
As to the latest debacle, just when you thought BA couldn’t get worse, they somehow manage. Not contenting themselves with drastically worsening things for customers, BA then turned on their loyal staff, and now they want pity for acting in a truly despicable fashion toward people who have in may cases dedicated decades of service to the airline. Hey, I own and run a business. I know that sometimes you have to make tough decisions where somebody is going to end up unhappy, and sometimes all parties are unhappy. The thing is, either your people are assets or not. If they are then you treat them well in general, show them in real terms that they matter, and tell them that you genuinely value them. If they’re not an asset then get rid of them in under a year, since you can pretty much tell in a few months. What I find most disturbing about BA is the utter cowardice they’re exhibiting here. Cruz is selling a load of goods that absolutely no one is buying when he lies about what BA is doing. If he at least had the courage to state that he simply wants to destroy the unions, wants to pay poorhouse wages because BA can get away with it, and couldn’t care less about the loyalty or lives of those who lose out, then Cruz would come across as a weasel but at least not a spineless weasel. Instead he’d rather try to push a lie that nobody believes. I think that if Cruz goes through with this, all Heathrow slots should be auctioned off for 10 years with 10% up for auction every year. Cruz wants the best of all worlds and I think it’s incumbent on the British government to force BA to accept that free market companies need to accept free market restrictions as well.
While I agree with many of your points I do take issue when you say “British Airways would love to start fresh, under the loose, almost lawless governmental and employment terms of some foreign competition” Every airline management would want that not just BA (with the exception of Air North) so it doesn’t really hold water if you’re trying to portray BA as bad for wanting to do that. Every airline wants to do that but BA is the only one with the balls to actually try it.
@ george.
To a degree, i’m with you.
Can I ask you this question?
Say the unions and the company agreed to temporary cuts to be repaid when BA starts making a pre-defined level of profit. Then the cuts the employees have taken would be returned to them.
Would you feel this is fair? Or you feel it’s fine to just reduce wages permanently by up to 50% and then in two/three years when BA is making £2b profit it’s just ‘suck it up’ to their staff?
Thanks
Last year BA made record profits but because they didn’t meet the unachievably high target the all company bonus was suspended and no one got a sausage. Alex got a 500k pay rise though. Does that answer your question?
Didn’t the pilots agree to terms similar to this to help BA weather the 911 crisis and BA just screwed them? I thought the pilot strike last year was because BA did not fulfill their end of the deal.
I cannot speak for the post 9/11 fallout however after the financial crisis of 2008 their pilots elected to take pay cuts to save jobs under the proviso that pay would be restored once the company was profitable again. From my understanding that is what the recent pilot strike was over.
A well written piece with a human perspective. This is a time when the UK and the world should be pulling together to get through the pandemic. It should not be used as an opportunity for the already extremely rich to get richer at everybody else’s expense.
The airline was virtually the most profitable major airline in the world by operating margin before this crisis. It has a temporary cash flow problem (with a €10Billion cushion) but still has enough money to purchase Air Europa for €1Billion… yet all the staff at BA have to take PERMANENT cuts to pay and Ts and Cs? Doesn’t add up except to corporate greed. The staff would happily take temporary cuts to help, but that would require inspirational leadership.
The reality is that staff have suffered years of “leaner and more efficient” erosion of T&C, missing bonuses based on metrics they have zero control while watching BA burn cash via IT failures, data breeches and oil hedges, and no-one “paying the price” for these failures. The trust and faith in BA leadership for many seems to be absolutely zero.
I think everyone can see that the aviation industry will need to make massive cuts, I don’t think any BA staff or Unions have claimed that there should be no job losses and while there’s a lot of focus around the “60% age cuts” it seems that most of the anger is aimed at the tearing up of T&C, to the point that proposals read like a Santa’s wish list of the last decade from Willie Walsh.
Maybe I’m foolish, but I don’t understand how a business can on one hand claim their actions are purely to save as many jobs as possible, while at the same time point blank refuse to consider changes being temporary in nature to weather the current storm. I’m also at a loss as to how nickel-and-diming your staff with changes to T&C, such as making it easier to sack them (and appeals harder) or making it harder to use annual leave are critical to BA’s survival.
Since when were you an expert in deciding if the quarantine is good or bad? Maybe this should have been done months ago and would still be active. UK government was maybe to slow and did not act fast enough perhaps hoping to keep the aviation business going.
It’s well established that this is idiotic from many perspectives. One, being that it makes no sense to keep places with lower rates of infection than domestic out. If anything, you beg for healthier people to come and create commerce, which is why every mind in travel and business has called it idiotic.
I have said this before. The UK is behind the curve in controlling the pandemic.
Now is the time to control who comes into the country to minimise the risk of further outbreaks while we go through the last month of control.
What commerce do you think these tourists to the UK will bring? They can queue to shop if that is their thing.
The tourist sites are closed or opening very slowly with pre booking necessary.
There is very little for tourists to do. And even without quarantine they are obliged to remain in one household. In other words, not to travel around the country.
Finally, the FCO is still advising no travel overseas for UK citizens which means no insurance cover for UK overseas travellers unless on essential business.
The UK still has nearly 200 deaths a day on the 7 day rolling average.
I would also point you to other countries who have brought the virus under control who still refuse to open their countries to international arrivals on non essential business, eg. Australia and New Zealand.
Let us see what is the position at the end of the month.
Just imagine that in this day, so many have an opinion on the rightness of BA, primarily because BA’s actions have no material effect on their lives.
I’d love everyone who believes BA is doing the right thing to tell me honestly that they’d have no problem having their pay slashed by 60% permanently, not just as a temporary action.
As has been said numerous times before, we understand that these are testing times and all need to tighten their belts. Tell me again BA is suffering financially, while they look to seal a €1 billion bid to take over Air Europa!
Despicable attitude towards staff who are expected to be ambassadors for their airline. Front line humans who have problems making ends meet like most people. Once again, redundancy? Certainly not at the moment, but fire everyone? Really?
Everyone connected to BA was proud. Now, who is? It has been a privilege to be looked after by the best. But whilst I’m at the mercy of the refund policy I promise you this Mr. Cruz I will not fly BA whilst you are in charge ever again!
@Mamma P around 2008 in the finance crisis BA did ask employees to do what you’re suggesting and they did. The agreement was that BA would pay back to the employees when things improved. After what? at least 5?boom years, and now 10-12 years after that crisis, so far as I know BA has never made good on their promise to repay their employees who agreed to make the temporary sacrifice at that time.
I always flew BA when I could, because their crew members (including pilots) were the best. Now, management has shown they don’t care about their crews, which means they don’t care about their passengers, or, ultimately, about safety. I would love to continue flying BA to support the wonderful crew members who are left, but I don’t want a single penny/pence to go into management’s pocket, especially Mr. Cruz’s, so I’ll find another airline.
I am appalled by BA leaderships actions to try and take advantage of a horrible situation. Their staff are having to go through so much like the rest of us just dealing with this virus and then on top of that you have an employer who could care less about you.
I fly transatlantic regularly and have always had a nice experience from the crew on board. I always thought they were this airlines best asset. Now to see the senior leadership to trash that very resources is so just sad.
I have never flown Ryanair as I have always disagreed with they way they treated both their staff and employees. Now I shall avoid flying BA going forward as well as long as Cruz and Walsh are at the helm. I just cannot put any money that might reward such callousness. And I will further avoid American Airlines as well transatlantic because I know they share their money on these flights.
I have a fair amount of miles I have earned on BA and will look to turn them in on one of the partners to somewhere other than the US so I can at least have BA pay the other airline to fly me.
Shame on you BA. I have held a grudge against Ryanair since they have existed and I can assure you there is enough competition where I can avoid you going forward as well.