Watching BA CEO Alex Cruz's UK parliamentary hearing...
Cruz says overall situation remains challenging, especially to see the airline through the winter unscathed
Cruz sees no "short-term" return to demand, sees slow recovery process
Cruz says the airline and IAG Group realised in March that Covid-19 would be the worst ever, forcing it to take permanent restructuring actions, including mass redundancies
BA says it would use existing contracts to adjust unspecific terms, rather than fire and rehire - as the unions claims, as per union agreements
Took 140 days into the consultation process for BA to reach agreement with non-pilot unions (i.e. Unite)
Cruz says important to get a testing regime in place to get feedback and real experience to reduce the quarantine measures - hopes to drive confidence in travellers
Cruz also critical of the weekly quarantine rule changes - deeply disruptive for customers and airline. Wants more consistency and less change.
@SamTarry (aka flag waiving) now asking about BA's finances
Also IAG too
Cruz calls MP Tarry "inaccurate" saying BA/IAG finances are "healthy"
During the GFC, the Q1 2009, BA lost £309m. First Q1 2020, BA lost £711m. Cruz says it took 4 years to recovery from pre-GFC levels
Cruz says he's "thankful" BA generated profits to be more resilient over the years.
BA £2.6bn in cash pre-crisis, and now has £2.1bn. BA burning £20m a day
BA £2.6bn in cash pre-crisis, and now has £2.1bn. BA burning £20m a day
Cruz says BA facing "long, protracted" recovery
2019 £805,000 salary all-in for Alex Cruz. No bonus for Cruz in 2019.
Cruz taken a 33% salary cut, others took 5% (like junior managers) etc
Cruz reiterated no bonus for BA staff in 2019, nor in 2020 or for "many years to come"
Responding to Tarry on the crew contracts, denies any 22 week layoff clause in contracts, says there is a clause to restore pay etc with staff. Cruz says "it is the right thing to do". Cruz rejects "zero hour contract" notion
On cabin crew ballot, Cruz says original ballot to bring single cabin crew team. As a result, the maximum basic pay impact is 15% for revised contract (reading between the lines)
Cruz says "just over" 13,000 redundancies will be made. 7,200 people have left the business as of last week. Cruz says the end result 10,000 people would leave the airline. Number and consultation remains open, CEO says.
Can’t live tweet more...dog walking duties
Picking up where I left off (and whatever else is interesting)
MP Gavin Newlands asks a rather pointless question about how many jobs could have been saved if Willie Walsh wasn't given a bonus nor Air Europa bid go through (UX transaction hasn't happened, price still being haggled & paid for by IB w/ Spanish Govt help.) so...
Notable point by Alex Cruz that while Iberia went through a huge restructuring, BA bought BMI. "A British affair, a British transaction", Cruz says, likewise, "an Iberia, a Spanish affair."
Cruz says the notion around fire and rehire is down to himself and his 100-member team in weighing up the restructuring options
On a scheme to second BA pilots to the military (with a secure route back to BA), but pilots have still received compulsory redundancies (!!!)
Cruz says he's not aware of such cases. (I hope he fixes that promise to pilots who served in the military)
Cruz says he's not aware of such cases. (I hope he fixes that promise to pilots who served in the military)
MP asks Cruz for further details at a later stage who have been seconded to the RAF and who have been made CR (look forward to those figures later)
Cruz says last in, first out for pilots wasn't used to the book but a "variation" which took in other factors. MP wants the average age of pilots made redundant (still expected to be a young number)
Cruz insists pilots + union were involved in designing process for shrinking pilot numbers
BA regrets it was not able to consider "some extremely good suggestions" that it received after 73 days because Unite/GMB refused to negotiate
73 days (refers to the start of the consultation process, which is a minimum of 45 days)
"My responsibility is to act now. I want British Airways to be a company that makes it": Cruz
For staff being balloted on union-agreed terms with BA, it means for those given deadline originally of Sept 19 to choose CR or a new contract no longer applies to certain staff groups
Sam Tarry MP asks about engineering and Mixed Fleet unlimited redundancy....
Cruz says there are different provisions to unpaid leave with different staff agreements. One reference is to new single cabin crew contract with winter unpaid leave....
Cruz says there are different provisions to unpaid leave with different staff agreements. One reference is to new single cabin crew contract with winter unpaid leave....
Cruz says its different to layoff clause, which is in 9,000 BA contracts "which have never been used"
Cruz says on a union-agreed layoff clause... "it is factually correct" that the majority of agreements in principle "with the unions" have a layoff clause.
CEO says there are specific clauses to how layoff clause could (seemingly last resort) and previous have not been used
CEO says there are specific clauses to how layoff clause could (seemingly last resort) and previous have not been used
Cruz stress it is facing an uncertain future and requires the flexibility but still any layoff clause would be used at the last-resort
Cruz reiterates the regret that Unite and GMB failed to come to the table until day 73 of consultation talks
Sam Tarry claims he has heard total cost saving from the redundancies and new contracts (I believe he refers to BA) it would amount to 4% of IAG's total cost savings...
Tarry wants to know why BA have implemented restructuring based on ideas floated by the airline the past (and the notion of using the pandemic to restructure - like every good crisis there is an opportunity)
Cruz says it is "crazy" for anyone to admit they were willing to take the difficult decision such airlines are taking, in response to Tarry
"There is no way we would have pursued this degree of structural change, at this pace, with this volume of change if we haven't had this pandemic": Cruz
Cruz vows the changes BA is making is huge, structural and looking into the future to help BA to deal with the aftershocks and direct cause of the pandemic
Errrr some MPs refer to Ryanair as a "UK airline" - shurly not!?
MPs generally not happy that BA has gone harder and faster to take action to stop the large cash bleed Vs. other UK competitors - but BA is a very large and different airline to the other UK carriers...
Cruz says removing BA slots as part of a campaign by Unite would be deeply negative
Over 3.5 years, 95% of slots awarded to carriers are foreign, and 83% of them are Chinese carriers, says Cruz.
Cruz confidence the restructuring would save the remaining 30,000 jobs at British Airways
Cruz, in response to the "use it or lose it" slot rule and to BA's 50% share of LHR, says he hopes to use all of BA's slot portfolio but can't say when normality returns where BA uses its slots normally
INTERESTING: BA CEO Alex Cruz says it may "possibly" need a further round of slot waiver relief for the Summer 2021 IATA season - becoming the first airline CEO to float an even longer extension of slot relief amid growing worries about weaker than expected demand
With BA running its 25-30% of its operations (capacity Vs. 2019 levels) this week - it is effectively using 25% of its 50% LHR slot portfolio allocation, says Cruz
Cruz warns if slot relief isn't given for the winter, there will be more airline bankruptcies and even more job losses sector-wide - but not a scenario airlines are expecting - given the EU, ACL slot coordinator signals are very positive
Cruz says its only focus is to get demand up and running to benefit BA - not other airlines - so not really a question of giving slots to other IAG airlines
In a dig at Virgin, Cruz says BA is the only airline to fulfill a mission to connect Britain to the world
There is going to be a lack of flying at Gatwick for BA, thus the need to secure 7 weeks unpaid leave from LGW staff. With winter slot relief, Cruz says it wants to "carefully plan" a schedule at LGW
Alex Cruz says Hong Kong was an "extreme example" of how an airport took Covid-19 checks seriously to make travel safer as such
Cruz says any new tax will have an impact on British jobs, taxes overall & the ability for British aviation to recover.
"Not the time to think about taxes, this is the time to think about removing barriers."
Cruz says aviation cannot justify growth w/out sustainability
"Not the time to think about taxes, this is the time to think about removing barriers."
Cruz says aviation cannot justify growth w/out sustainability
End of long thread. Phew.
BA processed 2.1m refunds, 1.6m vouchers and 35,000 refunds trying to process, says Cruz (so I was a bit premature on ending the long thread)
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