Throughout the day, a number of news sites have picked up on a memo sent to British Airways staff at Gatwick airport.
Most have jumped on the part where it says the airline doesn’t know if or when operations will start again. Mostly focusing on the “if” part.
This evening, I have received the full email sent to the cabin crew at Gatwick. It paints a slightly different picture.
I write following our letter to you of 16 March 2020.
In a short space of time the situation has significantly deteriorated. Our flying programme and load factors continue to decline. The impact on British Airways and the industry in general is like no other previous crisis we have gone through before.
Together we have been able to furlough thousands of employees by accessing the UK government’s job retention scheme. This has allowed us to pause our consultation and offer some immediate short-term relief to our employees during an extreme and difficult trading environment.
Unfortunately, there are no clear signs of improvement in air passenger demand. In the last week we operated fewer than 5 per-cent of our normal operating schedule. Our Gatwick and London City operations are now closed and there is no certainty as to when these services can return.
We have not ruled out suspending the remainder of our Heathrow operation. EasyJet, Ryanair and Virgin have ceased passenger operations and other major competitors have announced permanent structural cuts.
Market and industry reports (from IATA, consulting firms, investment banks etc.) suggest it will take time for consumer confidence to return and therefore there is little prospect of early recovery even after the immediate health crisis subsides. The global aviation body, IATA, has said that the industry has never seen a downturn this deep before, and that full year industry passenger revenues could plummet 55% compared to 2019, while traffic falls 48%. This highlights how unpredictable and difficult the situation is and how challenging it is likely to be going forward. It is also worth noting that many of British Airways’ competitors in Europe and globally are receiving state aid in various forms. The resulting competitive environment will create a distorted market where some of those competitors will have the option to provide overcapacity and lower fares.
We are continuing to implement actions across the business to preserve cash but many of these are short term measures. In our previous Section 188 letter we did say that if this situation escalates, we would need to address the impact on employment more generally. We are now at a critical juncture and must table proposals for structural change so that our business is in a credible position to respond to what will be a challenging and uncertain trading environment for a sustained period of time.
Our proposals include employee headcount reductions across the business based on a range of projections along with structural change to ensure that we are in a competitive and resilient position going forward. These proposals, if implemented, would ensure that we are prepared to meet some of the challenges ahead both from the Covid-19 crisis, but also from a material reduction in demand.
Employee headcount reductions implemented solely to adjust for reduced capacity-driven workforce requirements will still find British Airways with higher debt levels and lower cash positions than usual, making British Airways more vulnerable to additional smaller outbreaks of Covid-19, or any other economic shocks. It is for this reason that further structural change is proposed; it is needed to help British Airways be competitive and to face additional shocks in the short to medium term.
Our cabin crew community consists of employees on pre and post 2010 contracts. Across this group there are:
352 Customer Service Managers
1529 Cabin Crew
Headcount reductions – In addition to the proposed structural changes described above, and given the anticipated flying programme, we are proposing a reduction in headcount for the cabin crew community. Any proposals will of course be consulted over but in summary:
There are currently 352 CSMs. We are proposing to reduce this number by 79%
There are currently 1529 Cabin Crew. We are proposing to reduce this number by 57%.
Structural changes – In addition to the proposed headcount reductions above, the proposal would envisage the creation of a simple flying model all with the same terms and conditions, including operational flexibility. Those terms will include temporary layoff or short time arrangements and a revised pay and allowance structure that would apply equally to all. We would also consider the introduction of a new supervisory grade and flexible contracts to allow for seasonal/weekend working. We are also proposing that any new contracts would have new policies including on disciplinary and grievance procedures, performance and absence management which would be non-contractual. We are also proposing some changes to the Redeployment Agreement (see below).
If we are unable to reach agreement on these proposals as part of the consultation process (and we were unable to implement these proposals by relying on the reasonable changes clause in an employee’s contract) then we would propose to give all employees notice of dismissal by reason of redundancy and/or some other substantial reason, and offer them employment under new terms and conditions. To be clear, all 352 Customer Service Managers and all 1529 Cabin Crew are affected by this proposal.
Proposed outsourcing of ground services – Our ground teams consist of both A Scale, GCS 2014 and ABS contracts.
Across these groups there are:
239 Customer Service Hosts
43 Customer Service Executives
15 Customer Service Coordinators
20 Flight Control Agents
13 Airport Ops Controllers
2 Employee Services Advisors
2 Employee Services Executives
4 Attendance Support Co-Ordinators
2 Resourcing Advisors
2 Print and Stationery Agents
We are proposing transferring all of our ground colleagues to Gatwick Ground Services (“GGS”) and will consult about the legal, social and economic implications of this transfer and any measures that are proposed in relation to it and the affected employees.We consider that these changes would allow us to have a competitive and sustainable employee cost base, which would meet demand.These proposals are at a very early stage such that we wish to engage with you and discuss them, reformulating them where viable to do so. There is a possibility that we will look to close our full LGW operation in which case our headcount reduction is likely to be the full number of employees based at the airport, unless there remains some scope to transfer somework to Gatwick Ground Services (“GGS”). We will need to consult with you in an open and meaningful way and explore options to mitigate the impact and need for redundancies. We also wish to share further details on the rationale of our proposals and take you through the discouraging business assessments that we are seeing each day and week. You will have views on the proposed model and any selection methods that we employ, and we will consider and consult over matters you raise. As we said previously, we would very much look to see Unite the Union engaged in the development of our proposals and we will have an open approach to your ideas and solutions to align resource, save cash and build a stronger and more resilient British Airways.
I appreciate that many employees have been furloughed under the UK Government’s Job Retention Scheme. Our previous letter did say that the if this situation escalates, we will need to consider and address the significant impact that this will have on employment more generally. Given the significant deterioration in the situation, we cannot wait until the end of the Job Retention Scheme to launch a consultation. We anticipate that this consultation will take at least 45 days and we will keep the market situation under constant review. We cannot assume that our markets will return to normal in the near to medium future and we need to take action now to protect our business and employment for the vast majority of our employees.
Even if there are signs of improvement, we expect that the challenges for the business will remain in the long term and we need to focus on how we put ourselves in a position where we are able to meet and overcome these material challenges. Under the current circumstances, the cost of delivering any enhanced Voluntary Redundancy programme will now be prohibitively expensive and, subject to consultation, we are proposing to meet minimum statutory obligations along with any contractual notice pay, except for those who are eligible to the redundancy payment of 2 weeks’ pay per year of service under the Gatwick Memorandum of Agreement.
For redundancies implemented as a result of this consultation process, we will consult with you on the selection process and the terms of such redundancy arrangements but in principle we would propose to use statutory terms for redundancy pay and select employees for redundancy and for the new roles on factors such as operational needs, skills and performance.
We would normally apply the Redeployment Agreement 2012 to any crew who are made redundant, and to whom the Agreement is applicable, and who accept suitable alternative roles within the business. We will consult over the extent to which this is feasible given the degree and impact of the current crisis, and we anticipate that where any pay protection is offered it will be limited in scope and application. In addition, we are not proposing to apply the Redeployment Agreement in the future.
Given the scale of the challenge we are not proposing to use the non-contractual Redeployment Process Agreement 2012, to the extent applicable, and we are proposing that any crew who are made redundant through these proposals will not have access to the Career Transition Service which will cease in the near term. To meet our statutory obligations, impacted employees would have access to JobSearch. We anticipate that there will be very few vacancies as job cuts will be needed right across our business.
We would engage in consultation at an individual level too to ensure that affected employees are supported through this process.
We anticipate that if any redundancies are necessary, any notice of dismissal will be effective as soon as possible subject to any legal requirements and subject to this consultation. We propose that the period over which any dismissals would take effect would be as soon as possible and between 15 June 2020 and 31 December 2020.
We will provide you with a copy of the form HR1 under separate cover, which, as you will appreciate, will need to be updated as the consultation progresses. We will of course send you a copy of the amended form each time that it is updated.
There are 56 agency workers working temporarily for and under the supervision and direction of British Airways in the following directorates: CFO and Finance, Commercial, Customer Experience, Flight Operations, Legal, People, Strategy & Business Units, Engineering, IAG or GBS (working in IT or Procurement), Information and Digital. The type of work these agency workers are carrying out includes: Administrator, Air Accident Investigation Branch Pilots, Airbus A350 IOE, Aircraft Trader, CAD Technician, Campaign Executive, CFS Programme Manager, Colleague Communication Manager, Content Executive, Copywriter, Distribution Support Executive, Finance Business Partner, Finance Director, Occupational Health Practice Nurse, Property Workplace Consultant, Revenue Protection, Translation and Language Consultant, UX/UI Designer.
Our focus remains on working with you to avoid, minimise and mitigate redundancies and to explore alternative viable solutions for the near, mid and long-term survival of British Airways.
If you have any questions, please do not hesitate to contact me. Yours sincerely,
A bit of a long read, I admit! But from what I can take away from that is not all Gatwick based staff will be let go. Therefore, there must be at least some operation planned from Gatwick in the future. At least at the moment.
If BA were to close their Gatwick hub, what would the cabin crew that will keep their jobs do? They won’t go to Heathrow – as there will be a number of redundancies there too.
From a total outsider viewpoint, I would say that the routes served from both London Heathrow and Gatwick will be dropped. The likes of Barcelona, Nice, Glasgow, Edinburgh.
Going forward, it is highly likely that the leisure sector of the market will pick up before the business sector. And Gatwick has long been seen as the holiday airport.
Further to this, I have also received a somewhat sternly worded email sent to the staff from the Union. Understandably, they aren’t happy with the way BA are acting and it looks like the airline will have a fight on their hands before any redundancies are made…
Remember folks, there’s always two sides to every story…