LONDON—British Airways (BA) has announced plans to furlough more than 30,000 of its 45,000 staff.
The move came as the carrier’s parent, International Airlines Group (IAG), said it would withhold its final dividend to shareholders in an effort to sustain liquidity.
“As a result of the significant decline in flying, British Airways is making use of the UK’s COVID-19 Job Retention Scheme to help UK-based employees placed on furlough,” BA said in a written statement. “It has today reached agreement with trade unions, GMB and Unite, to apply this scheme to more than 30,000 cabin crew and ground-based employees in April and May. Under this scheme, furloughed employees will receive 80% of their base pay and of certain allowances. This agreement is subject to union ratification.”
Until now, furloughing has been an unknown concept in UK labor law, but the staff will be eligible for a UK government provision to provide 80% of a worker’s salary, up to a maximum of £2,500 ($3,100) a month.
The agreement does not include the carrier’s 4,500 pilots, who have previously agreed to take a 50% pay cut for April and May.
Some hours prior to the announcement, the GMB union said its BA membership is “relieved to finally be nearing some sort of certainty after what has been an extremely worrying time. GMB was at the forefront of campaigning for the people’s bailout package, which has formed the basis of ongoing negotiations with BA,” GMB national officer Nadine Houghton said.
“GMB and our sister union Unite have fought hard to secure members terms, conditions and job security. We believe the current deal, which is nearing its conclusion, secures this,” Houghton said. “But there are significant challenges for the aviation industry and whilst this current deal gives security for BA staff now, the government can’t take its eye off the ball. GMB is calling for more government intervention to protect the livelihoods of many more workers across the sector.”
The BA statement noted that IAG’s other airlines have already received support from similar job retention and wage support schemes for more than 17,000 employees in Spain and that the parent company is seeking similar support in Ireland, where member airline Aer Lingus is based.
Meanwhile, in a joint announcement to the London and Madrid stock exchanges, IAG said the impact of the COVID-19 pandemic has resulted in the company’s board deciding to withdraw the proposal to the next annual shareholders’ meeting to pay a final dividend of €0.17 ($0.18) per share and, instead, “to propose the allocation of all the profit for fiscal year 2019 (except the amount already paid as interim dividend) to the voluntary reserve.”
The board also resolved to delay the date of the shareholders’ meeting, originally scheduled for June, until the end of September.
Related Content
