Drastic measures at British Airways are being undertaken in the belief that “the worst is yet to come”, IAG boss Willie Walsh has said.
Walsh told The Sunday Times “2021 is going to be the toughest year ever for the industry and 2022 is going to be really challenging”.
“People will survive this initial crisis but next year is going to be really tough, because some airlines are surviving on the back of support they’re getting and they’re not recognising the scale of the change – and they’re hoping things will recover quickly, when I don’t believe they will,” he said.
BA has furloughed 23,000 staff and has a £300 million government loan to help it through the crisis. Walsh wants to “fire and rehire” another 30,000 staff, mainly cabin crew on old contracts who are much better paid than new recruits.
Unions argue BA is trying to force through pay cuts of up to 70% while taking advantage of the Covid crisis. However, Walsh argued that without these changes, there would be “no BA” left.
“Post-9/11 was a really challenging environment – globally, passenger traffic fell in October 2001 by about 18%.”
This, he said, compared with the Covid crisis. “We’ve seen passenger traffic fall globally by 55%.”
Walsh said BA was “not trying to do anything that wouldn’t be normal in 99%, maybe even more, of companies in the UK”.
Walsh, who had been due to retire as chief executive of BA’s parent company in March, will now leave in September. His successor will be Luis Gallego, currently chief executive of Iberia.