British Airways Update

Update 7th July: 

 

Air bridges:

The FCO has updated its global advisory against ‘all but essential’ travel, exempting destinations that no longer pose an unacceptably high risk for British travellers. This means travellers from England have the go ahead from the Foreign Office to travel from July 4 and will be exempt from quarantine on arrival back to England after July 10 to this list of countries. These countries have been assessed as no longer presenting an unacceptably high risk to British people travelling abroad, with the Foreign & Commonwealth Office’s travel advice being based on risks to British nationals, including in-country public health assessments. The list of these countries can be found here: https://www.gov.uk/guidance/coronavirus-covid-19-countries-and-territories-exempt-from-advice-against-all-but-essential-international-travel     

I know this will come as welcome news to all those involved in the aviation and tourism sector after what has been an extremely difficult few months for the industries. I hope it will prove to be a pivotal moment in the recovery of these sectors and will provide businesses, airports and airlines with the confidence that these industries will bounce back quickly, reducing the need to make redundancies.

The Government continues to support businesses in the aviation and tourism sectors through one of the most generous economic packages provided anywhere in the world. We have always recognised that the measures we’ve taken to limit the spread of Covid-19 will have a substantial impact on our economy, including sectors like tourism, but that was essential to protect our NHS and save lives. These measures will be regularly reviewed and we’re working with the aviation sector on a restart programme, to allow international travel to resume as soon as it is safe.

Correspondence with Minister for Aviation:

Just to update you, I have received a further response to my queries on behalf of constituents from the Minister for Aviation, Kelly Tolhurst MP, earlier this week. In the letter she outlined the Government is still “prepared to enter discussions with individual companies seeking bespoke support as a last resort, once they have exhausted all other options. Any intervention would need to represent value for money for taxpayers.” She also went on to explain how she had “together with the Secretary of State for Transport, spoken directly to IAG’s Chief Executive, Willie Walsh, to discuss the organisation’s plans and its engagement with staff and union representatives. I have offered to support these engagement efforts where possible and appropriate to do so, as well as encouraging the company to go beyond its minimum legal obligations in supporting its employees at this difficult time. I have also met with the unions which represent employees in the aviation sector. I encourage BA and the unions to engage constructively with each other, striving to provide employees with as much certainty as possible during this challenging time.” 

Urgent Questions in the House

In Urgent Questions on July 2nd, the Secretary of State for Transport was asked about his latest thoughts on the matter of British Airways. His response was to outline his disappointment that British Airways, as well as other major companies, would take advantage of the Government’s furlough scheme, only to make significant redundancies at a later date – this is not what the furlough scheme was intended for. He also emphasised the need for unions and companies, like British Airways, to cooperate and find a way to protect jobs and employment opportunities both now and in the future.

 

Update 19th June: 

I am writing to provide you with an update on the ongoing concerning news regarding British Airways, as well as the work myself and my fellow MPs are doing to reassure local constituents across the areas affected by the challenges to aviation, due to this public health emergency. This is a hugely challenging and upsetting situation and I want to thank you for your patience, and I am so sorry it’s such a worrying time for so many of you.

Correspondence with fellow MPs and Ministers

The Employment (Dismissal and Re-employment) Bill, which seeks to prohibit employers dismissing workers and subsequently re-employing them with diminished terms and conditions, has now been brought forward. The Bill has cross-party support and I have urgently written to the Department for Business, Energy and Industrial Strategy to raise this with my Ministerial colleagues there, I am sure there will be further developments on this potential legislation, which was also raised in the Chamber today. I have meanwhile contacted the Transport Secretary, Grant Shapps, this week requesting what steps the Government will now be taking regarding British Airways, whilst also highlighting thoughts and concerns constituents have raised with me. I have asked Mr Shapps to further look at the slots issue at Gatwick too so that airlines do their best to be part of the recovery at Gatwick. 

I have spoken and worked with to my local MP colleagues, and in particular the MP for Crawley, Henry Smith, about this and we all share your deep concerns and ongoing upset. I also believe Henry is speaking with BA this week. The news about BA and Virgin Atlantic regarding Gatwick Airport is absolutely devastating for constituents, the South East and the aviation industry. I have friends and family who work at Gatwick and in the wider industry, so as a friend, an MP and a Government Minister, I personally feel very strongly about the need to protect employees in this industry, during what is a hugely worrying and uncertain time.   

I have spoken with the CEO of Gatwick Airport, Stuart Wingate, Director of Corporate Affairs, Planning and Sustainability, Tim Norwood and Public Affairs Manager, David Boot on various matters concerning Gatwick, including British Airways. We are speaking again shortly. I am also continuing to engage with Kelly Tolhurst, the Aviation Minister regarding the aviation sector, job threats and impact at Gatwick.

When answering questions on the Aviation Industry last week in a Parliamentary Urgent Questions session,  the Minister for Aviation outlined her regret and disappointment with the announcements regarding redundancies by British Airways and Virgin Atlantic, particularly “companies that benefit from the job retention scheme, which was not designed for taxpayers to fund the wages of employees only for those companies to put the same staff on notice of redundancy during the furlough period.”

Correspondence with British Airways

I urgently wrote to the CEO of British Airways, Alex Cruz, as well as the CEO of BA’s parent-group, IAG, where we looked to raise the grave concerns of my constituents and their staff as well to add my voice to theirs in sharing these serious worries. I received a disappointing correspondence from both. In Mr Cruz’s response, he states that British Airways “are open to any ideas on how to mitigate the impact of COVID-19 on our business and that their aim is to save as many jobs as possible while securing BA’s long-term future.” He also adds that “BA have taken advantage of the support offered by the UK Government in the form of employment support and guarantees for financing on commercial terms.” I suggested we organise a formal group engagement with MPs representing areas affected by any BA changes at Gatwick, so we may hear from him directly and discuss what we can all do to assist with matters. This has not occurred, but I do understand he is engaging with Henry Smith this week. I have attached the link to my letter sent to Alex Cruz as follows: https://www.mimsdavies.org.uk/news/mims-davies-supports-airline-workers 

 Mr Willie Walsh, Chief Executive of BA parent-group, IAG, responded to me at the end of May, in which he outlined the impact of the Covid-19 outbreak on British Airways, explaining how he does not see business returning to 2019 levels until 2023/24. He did praise the Government’s decision to extend the Coronavirus Job Retention Scheme, although as of yet British Airways will not be taking advantage of this scheme beyond June, which was put in place to protect the jobs of employees at companies struggling financially during this crisis.

The Transport Select Committee

In the Transport Select Committee’s recent evidence session with Mr Walsh, they covered the challenges at BA, the approach of IAG to state-aid and redundancies in Spain vs the UK, planned staff redundancies and changes to terms and conditions, commitments to some local airports, passengers and staff health protection and passenger refunds. Whilst it was accepted that BA faces a fight for its survival, there was concern raised at the level, timing and approach, of the staff restructuring at BA. The Committee outlined how this position is contrasted with the IAG carriers in Spain, who had sought and received a EUR1.1billion state-backed loan and where few job losses were expected.

Following Mr Walsh’s appearance before the Transport Select Committee, the Committee’s Chair, Huw Merriman MP, stated that “When it was put to Mr Walsh that he could demonstrate that these changes are ‘solely’ about company survival by promising to reinstate terms on a pro-rated basis (pegged to BA returning to profitability and compared to its pre-Covid profits), he refused.”

Furthermore, in Mr Walsh’s letter to Huw Merriman, received at the end of last week, Mr Walsh addressed some of the comments made during the Urgent Question, including the development over the weekend to add all 4,300 BA pilots to the ‘fire and rehire’ terms which apply to crew and other staff. Contrary to Mr Walsh’s claims, I understand that, via email contact from Mr Merriman, Mr Walsh has not responded to invitations to meet with Government Ministers and has not asked for any specifically. Mr Merriman has provided a note this week on where he sees matters to fellow local MPs. He reported last Thursday, that Mr Walsh failed to attend the roundtable which the Home Secretary and Aviation Minister held with the CEOs of Heathrow, EasyJet, Virgin and other aviation industry figures. I do understand Mr Walsh has subsequently now agreed to a meeting with a Government Minister. Furthermore, Huw Merriman reports that Mr Walsh took issue with the claim his entire workforce were under consultation and threatened with redundancy and/or a change to terms and conditions which would lead to dismissal should a worker refuse to accept. The report goes on to outline that over 35,000 employees (out of approx. 42,000 in total) will be subject to ‘fire and rehire’ or redundancy. In addition, intra company transfers and overseas workers are not included. The vast majority of staff are subject to ‘fire and rehire’. 

Mr Merriman went on to state that “Some of these changes being planned by BA look to have little correlation with cost-control. Many of these changes have been attempted before but thwarted by staff refusal. This has led to the view that BA, and Mr Walsh in particular, are using this opportunity to bulldozer reforms through once and for all.”.

Support for aviation employees

The UK Government is continuing to help those affected by job cuts in the aviation sector, including possible “bespoke support” for aviation firms, as well as anyone affected, with the Department for Work and Pensions available to help employees access support available. The Department for Transport has also set up a restart, recovery and engagement unit to work with the aviation industry on the immediate issues affecting the restart of the sector and its longer-term growth and recovery. As part of that, we have established an aviation restart and recovery expert steering group, which is formed of representatives across the sector, including airports, airlines and ground handlers, industry bodies and unions.

Concerning the wider aviation industry, there have been extensive and vital conversations and engagements between Her Majesty’s Treasury and the Department for Transport on this matter. As a Government, we are acting as quickly as possible to respond to the latest developments during this incredibly challenging time. 

Despite significant pressure from MPs, including myself, unfortunately the terms and conditions of employment are usually a matter for employers and employees, but I want to again assure everyone that employees do have recourse to several options for support in cases in which redundancies are taking place. In crises such as this, we would hope all organisations who are taking such measures would treat their employees with the social responsibility one would expect. I will continue to do everything in my power as the MP for Mid-Sussex to make sure this is understood by those organisations announcing redundancies which affect constituents, as well as continue to engage with fellow MPs and Ministers to see what can be done to resolve this issue.

Airport slots

In the chamber, MPs and Ministers have raised the point that if BA are seeking to reduce operations then perhaps the Civil Aviation Authority should review landing slots, once the state of the competition is known. BA has 51% of Heathrow’s landing slots and many of these are legacy gains. BA holds the most lucrative; including to New York JFK and if BA cuts 25%+ of its workforce, as planned, it would be questionable whether they could manage the slots they have. It is a fair presumption to make that when the slots holiday is over (expected Oct), BA will need to hire new workers on the cheaper terms to manage the slots and ramp back up. If BA, via rehiring on new terms, are effectively creating a new low-cost airline, it is a fair point to ask why BA should continue with legacy slots. The Transport Select Committee stated that it could be said there are steps the CAA should take to allocate the slots more equitably and reconfigure competition.

The Rt Hon. Grant Shapps, the Secretary of State for Transport also sent me a letter last week on the latest update on the use of airport slots this year, stating that: 

“For Summer 2020, the European Commission has temporarily suspended the airport slot usage rules which require airlines to operate their take-off and landing slots at least 80% of the time to keep them the following year (the"80:20" rule). This was something I was keen to see happen to benefit the environment and industry and one which I wrote to the Commissioner for Transport, Adina Välean, about in early March. The waiver will apply from 1March to 24 October 2020. To qualify for the waiver, airlines must release any unused slots back to the coordinator, so that they can be reallocated to other airlines if requested. This means that they can be used on an ad hoc basis to support essential services such as repatriation and freight operations.

For Winter 2020, unless the temporary slot arrangements are extended, airlines will need to operate their slots in accordance with the 80:20 rule if they wish to retain them for the following equivalent season. If the criteria are not met, the slots will be reallocated to other airlines to operate. Whilst there is no role for government to play in this allocation, it is in the interest of UK consumers that all airport slots are used efficiently.”

Hopefully, this will also present an opportunity for airlines who take up these slots to employ local staff to ensure employment in the sector can hopefully remain at normal levels, as well as providing continued employment opportunities in the aviation industry at airports.

Furthermore, Gatwick Airport has just announced that, from June 15th, operating hours will increase to 06:00-22:00 and North Terminal operations will resume with easyJet, Wizz Air, Ryanair, Belavia, Vueling and Blue Island flights. This is a positive first step in helping the aviation sector to recover and the Government will continue to support airports and airlines during this recovery period.

I have attached a link to the Government’s most recent guidance for COVID-19: https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response    

I hope this update was helpful. I am due to speak to Gatwick again shortly after their latest operational announcement. As I have said, I will continue to do everything I can to engage with Ministers, MP colleagues in Parliament and various representatives in the local aviation sector to find solutions to ensure we can protect as many jobs as possible, as well as ensuring constituents threatened with redundancy have the support they need. I know it is a greatly worrying time and I hope that BA, despite the pandemic having a huge impact on their business, will choose not to decimate it further by not valuing their fine staff and look to support them positively through this process. I believe customers will have long memories when it comes to actions around this pandemic.