British Airways in battle for ‘survival’ over coronavirus: BA boss says the economic impact will be ‘more serious than the financial crisis, SARS or 9/11’
British Airways today revealed coronavirus is threatening its survival as staff were told there will be job cuts and aircraft will be grounded because of the ‘worsening situation’.
Chief Executive Alex Cruz has written to all 45,000 workers saying the global pandemic is a crisis ‘of global proportions like no other we have known’, more serious than the 2008 financial crash, SARS or 9/11.
‘Please do not underestimate the seriousness of this for our company,’ read the message from Cruz, which has been leaked this afternoon.
Chief Executive Alex Cruz has warned that British Airways’ future could be at risk because of coronavirus
BA has already been forced to cancel flights to mainland China, Italy and Spain to stop the spread.
Airlines around the globe are cutting flights and costs amid plunging demand with experts saying they will collectively lose $130billion this year.
The industry is braced for further failures as no carrier is exempt from the short-term pain that has already seen British regional player Flybe collapse and Norwegian’s stock lose about 80% of its value in a month.
Cruz said that BA, which along with Iberia and Aer Lingus is part of the financially strong IAG, was more resilient ‘than ever before’ with a strong balance sheet.
But the airline was under ‘immense pressure’ and would ‘have to react fast and definitively in response to the worsening situation’ he said in the message.
As a result, jobs would be lost ‘perhaps for a short period, perhaps longer term’ and the company was in discussions with trade unions, Cruz added. Aircraft would be grounded in a way that the airline has never had to do before, he said.
A spokeswoman for BA, which is based at Heathrow in London, declined to comment when asked how many jobs could go. The airline employs 45,000 people.
While Britain was exempt from U.S. travel restrictions announced on Thursday which will hit its continental European counterparts, it has already cancelled flights to the U.S. as well as Italy, China and South Korea.
New British government advice warning against all but essential travel to parts of Spain on Friday could further hurt BA, which has 17 flights to Madrid daily, plus dozens to other Spanish cities.
Shares in IAG traded up 8% to 355.8 pence in the hour after Cruz’s warning over jobs, paring gains of as much as 14% earlier in the session. IAG’s stock price has fallen by 42% in the last month.