Reading the runes from BA

By | Category: Travel tips & opinions

The announcement, yesterday, that British Airways might cut 12,000 of its 40,000 jobs in two months’ time surely tells us how the airline sees the future of travel.

tal fins of British Airways planes
BA is reading the future and it doesn’t seem to like what it sees

The story, however, isn’t quite how the mainstream media portrayed it.

In a letter to staff posted on BA’s website, Alex Cruz who has run the airline for the last four years, says, “We have informed the Government and the Trade Unions of our proposals to consult over a number of changes, including possible reductions in headcount.”

Numbers might have been talked in private and leaked so, unofficially, twelve thousand may be the number but it could be higher or lower.

What it really means is that it indicates the airline bosses see a contraction in business for quite a period and not just a few months. Why should I say that? Because it takes many months to train cabin crew and even longer to train pilots. Removing them from BA’s payroll tells me that BA is looking at the market in a year or so and still doesn’t see air travel returning to the same levels it was at the beginning of the coronavirus outbreak.

That BA and its irrepressibly expansionist retiring leader, Willie Walsh, (who now runs the holding company IAG) is taking such a view also tells me that he is wary if not downright pessimistic about the next year or so. For all I know he is pessimistic for a longer period.

He has been strong on growth and acquisition buying Aer Lingus, Vueling and Iberia whilst also interested in acquiring Norwegian. Initially he was opposed to state support of airlines during the early days of coronavirus and Cruz says he is not looking for government support other than that offered to all industries.

Yet.

It seems Walsh, Cruz and BA have become less sure of the future and if they are of that view the rest of us should take note.

If there is this contraction, I think it will probably be due to a reluctance of people to travel overseas since BA is predominantly an overseas airline. And of overseas countries to accept passengers because they will have qualms about potentially re-introducing the virus to their citizens.

Restoring that confidence will take time and what none of us knows is how much time it will take.

On the one hand you could say that there will be a bounce back in summer 2021 but that is surely dependent on whether coronavirus returns this winter and whether a vaccine is available? It seems that BA is thinking that a vaccine won’t appear anytime soon. If it did it wouldn’t be planning on so many staff layoffs.

IF BA is right then international travel and tourism will be hit for longer than many hope. It also means that more tour operators operating overseas holidays will have to wait longer for an upturn.

Can they afford that wait given their cash resources?

Of course, BA is just one airline and others might be taking entirely different views. I might be looking at what BA has and hasn’t said and be reading the runes incorrectly.

We will only know which is right in s few years’ time.

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