Thousands of British Airways cabin crew are voting to accept pay cuts as a fierce struggle for survival
Thousands of British Airways cabin crew have voted to accept pay cuts as the company struggles to survive.
The airline and its parent company, IAG, are in the process of strengthening their balance sheet.
IAG is seeking to raise € 2.74 billion (£ 2.5 billion) in the stock market, while BA has plans to cut thousands of jobs.
Survival bid: BA cabin crew voted overwhelmingly in favor of wage agreements between BA and unions
BA cabin crew based at Heathrow and Gatwick – along with baggage handlers at Heathrow – voted overwhelmingly in favor of wage agreements between BA and unions last week.
The company initially said it should make 12,000 layoffs, but CEO Alex Cruz suggested at a hearing before the Transport Select Committee last week that the final number would be closer to 10,000.
Thousands of jobs are thought to have been saved because BA personnel agreed to voluntary redundancy, part-time work, flexible work, or by taking unpaid leave to get the airline through the winter.
According to the latest agreements, after nearly five months of consultations, the vast majority of BA’s 42,000 employees have signed agreements, while more than 7,000 have accepted voluntary redundancies. Most of the remaining departures will take place by the end of the month.
BA lost £ 711 million between March and June, compared to £ 309 million in the first three months of 2009 after the financial crisis. It burns £ 20 million a day. In the first week of September, it flew 180,000 passengers, compared to 995,000 in the same week last year.
Meanwhile, IAG is struggling this weekend to convince shareholders to support its emergency fundraising.
The cash call is intended to help the group survive a prolonged downturn in air traffic. Demand is not expected to recover until 2024.
IAG reportedly has more than 100,000 private shareholders in the UK. It urges them to take up the three-for-two stock offering as it issues nearly three billion new shares at a discounted price.
An IAG spokesperson said, “We encourage all shareholders to be aware of their rights so they know what their options are.”
Qatar Airways, IAG’s largest investor with a 25.1 percent stake, subscribes to the rights issue.
The move was approved by shareholders at the annual meeting on September 8.
Meanwhile, it was revealed last week that tour operator TUI is reportedly planning a fundraising effort of up to € 1 billion to get through the winter amid rising debt that analysts say could reach € 4.5 billion by the end of the year. .
According to the German newspaper Handelsblatt, TUI’s largest shareholder Alexey Mordashov, a Russian billionaire, has pledged € 300 million.