U.K. Airlines Warn of Further Job Cuts Once Furloughs Expire
(Bloomberg) -- U.K. airlines are warning that thousands of jobs could be lost if the government fails to reverse course and offer the industry an extension of the furlough program with travel in a slump for a second summer season.
Carriers have asked the government for a short-term, sector-specific jobs support plan to tide it through the usually lean winter months, Tim Alderslade, the chief executive officer of trade group Airlines UK, said in an interview.
The British Airline Pilots Association separately called for a furlough extension, saying the sector is still effectively stuck in lockdown from the coronavirus crisis. The government on Friday reiterated that it has no plans to offer an extension, despite ever-changing travel restrictions and expensive tests that have wiped out a second summer season in a row.
“It’s a picture of contradictions,” said Alderslade, whose organization represents firms including British Airways and EasyJet Plc. “The aviation industry is still effectively closed and the various, constantly changing travel rules in place are putting people off flying. On the other hand, the government is saying that things are open again and is pulling the plug on support.”
The U.K.’s Coronavirus Job Retention Scheme, which supports 1.9 million people, is due to end on Sept. 30 following the lifting of almost all pandemic restrictions last month. Yet the government policy of moving countries within its so-called traffic-light system that determines quarantine requirements has kept demand for air travel below levels in Europe.
On Wednesday, the government eased border restrictions, adding Germany and a number of other European countries to its low-risk green list and lightening measures for France, while moving India and the United Arab Emirates from high-risk to medium. At the same time, Mexico was pushed into the high-risk group requiring hotel quarantine on entry, causing British Airways to add repatriation flights.
The rapid changes have disrupted the summer travel season, when aviation firms typically make enough money to carry them through the slow winter months. Seat capacity in the U.K. this week was 42% of 2019 levels, compared with 68% for the wider European region, according to data from OAG.
There are no plans to extend the furlough beyond the end of September, said Max Blain, a spokesman for Prime Minister Boris Johnson.
“We’ve set out the time for when the furlough scheme will come to an end, there’s no plan to change that,” said Blain at a press briefing on Friday. “We are cautiously reopening, adding more countries to the green list and through the success of the vaccination program, we’re seeing more people able to travel and that will continue.”
Balpa said it’s in negotiations with airlines to prevent job losses and was being asked to agree to “radical additional cuts” to pilot terms and conditions due to the furlough coming to an end.
Last year, IAG SA-owned BA came under fire from unions and lawmakers for its initial plan to cut as many as 12,000 workers, although it eventually slashed 10,000 jobs and reached deals with various unions.
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