British Airways pilots have opted to take a 50 per cent pay cut in April and May as the company fights for its survival amidst the coronavirus pandemic.
BA employs 4,500 pilots who will take two weeks of unpaid leave each month. The reduction in their salary will be spread out over three months to reduce the blow.
Data from Glassdoor.com indicates that many BA pilots are on six-figure salaries.
Earlier this week BA staff faced widespread lay-offs and faced the prospect of the company being renationalised in order to keep it afloat.
Under the new deal, it is indicated that a consultation on potential job losses is going to be put on hold. Though indications suggest airlines may layoff personnel before the government measures kick in.
BA has negotiated a deal with the pilots’ union BALPA to avoid widespread lay-offs
According to Sky News, British Airways has sent a letter to staff telling them the plan had been agreed with the pilots’ union BALPA to fight ‘the immediate threat to the business in the face of COVID-19 and the unprecedented impact this is having on the airline’.
The letter also states: ‘We are committed to finding solutions and will focus any future discussions on exploring and exhausting all voluntary measures.
‘We acknowledge that this situation is hugely challenging for individuals and their families. BA and BALPA are committed to working together to find solutions during this unprecedented period and support the future of our airline.’
Chairman of BA, Alex Cruz, told his 45,000 staff that the viral outbreak is threatening the company’s survival.
Mr Cruz warned that the escalating crisis is ‘of global proportions like no other we have known’, including the 2008 Financial Crisis and 9/11.
The announcement comes as the global airline industry fights for its survival. EasyJet has said it would ask employees to take pay cuts and unpaid leave.
Norwegian announced it would lay off half of its 11,000 with a view to re-employing them when the crisis was over.
Qantas Airways has told most of its 30,000 staff to take leave and Lufthansa warned the industry may not survive without a state bailout if the pandemic continues for a long time.
The Airline industry is fighting for its life as ticket sales have flat-lined due to the pandemic
But the pilot’s trade union has warned that airline companies could begin ‘winding down’ and laying off staff next week unless promised Government support for the industry is delivered quickly.
The British Airline Pilots Association (Balpa) said the UK’s aviation industry is at risk of ‘collapse’ while it waits for assistance from the Government to alleviate the impact of the coronavirus pandemic.
Transport Secretary Grant Shapps said on Wednesday the Government was committed to helping the sector.
Balpa general secretary Brian Strutton said the aviation sector had been ‘hit first and hardest’ by the Covid-19 outbreak, which has led to a downturn in air travel.
Balpa General Secretary Brian Strutton said jobs could be lost before support came to help
He said in a statement: ‘It’s disgraceful that the Government keeps promising to help but is still sitting on its hands while airlines are shutting down.
‘Airlines can’t survive with no revenue coming in and are already cutting wages and jobs.
‘Unfortunately the rescue packages put together yesterday are not ready yet but airlines are in crisis now and need help immediately.’
Mr Strutton said state investment in UK airlines is ‘essential as a matter of urgency before it’s too late’.
The union claimed that airline companies will be ‘winding down next week’ before the Government support scheme is ready.
Speaking on Wednesday, Mr Shapps said: ‘Coronavirus is having a crippling impact on the aviation industry and we cannot allow it to force world-leading, well-run, profitable firms out of business.
Transport Secretary Grant Shapps has promised that the government will support the airlines
‘We are extremely grateful to airport and airline teams who are continuing to help passengers get home safely. We stand firmly behind the sector and expect to announce a series of support measures shortly.’
On Tuesday, Chancellor Rishi Sunak announced that a package of measures would be agreed to support the aviation sector.
The UK Government is drawing up plans to buy shares in British Airways and other airlines hit by the Pandemic Crisis to keep them afloat, insiders confirmed.
Talks are in place which could see the State holding equity stakes in companies on the brink of collapse as coronavirus panic damages the UK economy.
The Government is understood to be under pressure to intervene after it was warned that Chancellor Rishi Sunak’s £350billion bailout is ‘not enough’.
A Department for Transport spokesperson said: ‘A number of measures to support the sector have already been announced, including Time to Pay, financial support for employees and the Bank of England’s Covid Corporate Financing Facility.
‘The Government is working urgently to develop further measures, as necessary.’
Owen Farrell of Saracens celebrates with the trophy after the European Rugby Champions Cup Final match between Racing 92 and Saracens at the Stade de Lyon on May 14, 2016
Other industries are also resorting to savage salary cuts in order to survive the existential threat caused by the coronavirus.
Coach of the Irish national rugby team, Andy Farrell, and his son, Rugby Union player Owen Farrell, accepted emergency pay cuts yesterday as rugby union took unprecedented action to survive a financial downturn.
According to the Times, Saracens, Gloucester, Wasps, Worcester Warriors and Bristol Bears announced that they would be implementing a 25 per cent pay cut for all employees, with the exception of the lowest earners, until rugby resumes in a bid to protect as many jobs as possible.
For Owen Farrell, the England captain and Saracens fly half, a 25 per cent pay cut would be worth about £16,000 a month. All Premiership clubs are now expected to follow suit.
Lance Bradley, the Gloucester chief executive, says the league could be shut down for as long as six months.
At present, the next four rounds of the Premiership season have been postponed but Bradley said: ‘We think the most likely scenario is that we could start playing rugby again in September.
‘If that were to be the case then this club will have no income for six months, literally no income. And our wage bill is around £1million a month.
‘So it doesn’t take very long to explain that with £6million going out and nothing coming in on a business where last year we lost £2million, it doesn’t add up.’