Fears are growing for jobs at Aer Lingus as British Airways moves to lay off 12,000 workers in the expectation that the Covid-19 crisis will inflict long-term damage on aviation.
International Consolidated Airlines Group (IAG), owner of both carriers, along with Spain's Iberia and Vueling, said on Tuesday that its operations lost €535 million in the first three months of the year.
British Airways, the group’s biggest airline, is notifying trade unions of a proposed redundancy plan and restructuring, according to the group’s statement.
“The proposals remain subject to consultation but it is likely that they will affect most of British Airways’ employees and may result in the redundancy of up to 12,000 of them,” IAG said.
The statement did not indicate if Aer Lingus had similar plans but the news sparked fears that the Irish carrier could take similar steps as the coronavirus pandemic drags into next month.
Aer Lingus has reduced passenger flights by about 90 per cent in the face of widespread travel bans and cut pay by 50 per cent across the entire organisation for this month and May.
The airline did not comment on British Airways’ move. Observers on Tuesday agreed that it may be “a matter of time” before Aer Lingus decides on cutting its workforce. It employs 4,000, mainly in Dublin, Cork and Shannon airports.
One source pointed out that Aer Lingus was relying heavily on the Government’s Covid-19 pay subsidy and cargo flights bringing medical equipment and other critical supplies to the Republic.
Trade unions Fórsa, which represents pilots and cabin crew at the airline, and Siptu, which represents ground staff, are due to hold talks with Aer Lingus on Friday.
However, both unions said that the airline had not indicated to them that it was considering laying off staff in the short term.
The unions have been in regular contact with the company since the crisis grounded flights in March.
Neil McGowan, Siptu aviation sector organiser, said that the union was hoping to get some indication from Aer Lingus about workers’ pay after the end of May.
He pointed out that it would be a considerable period of time before airlines returned to anything like normal levels of activity.
“We are looking for certainty on earnings into June and July for people,” Mr McGowan added. His organisation represents about 1,500 workers in Aer Lingus.
IAG is thought to be one of the European airline groups best positioned to withstand a prolonged shutdown in aviation.
Analysts at Dublin stockbrokers, Davy, pointed out a month ago that IAG had around €7 billion in cash.
The group said on Tuesday that the “impact of Covid-19 on current operations and the expectation that the recovery of passenger demand to 2019 levels will take several years”, prompted British Airways to seek redundancies.
British Airways formally notified unions of its restructuring and redundancy proposals.
The pandemic is set to take a heavy toll on aviation. Irish carrier, Cityjet, successfully sought High Court protection from creditors and had Kieran Wallace of KPMG appointed as examiner to draw up a rescue plan for the airline.
Andy Jolly, managing director of Stobart Air, which flies regional services for Aer Lingus, told staff in a letter on Tuesday that the smaller carrier had only narrowly avoided going down the same route.