British Airways pilots are going to take a 50% pay cut in April and May as the airline battles to stay in business amid the coronavirus outbreak.
The drastic measures mean BA’s 4,500 pilots will take two weeks of unpaid leave in each month but the reduction to their wages will be spread over the next three months.
Last week, BA chief executive Alex Cruz warned jobs would be lost and planes grounded in the face of the commercial turmoil caused by the pandemic, which has seen worldwide flight cancellations and plunging demand.
In message to employees – titled “The Survival of British Airways” – Mr Cruz said the current crisis was more serious for the airline industry than 9/11 and the financial crash.
In a letter to staff, British Airways said the plan had been agreed with the pilots’ union BALPA to fight “the immediate threat to the business in the face of the coronavirus epidemic and the unprecedented impact this is having on the airline”.
It adds that the move is “to protect the future of the business and jobs” – and in order to reduce the impact on take home pay, there will be the option to suspend pensions contributions.
Under the deal, it is indicated that a consultation on threatened redundancies is going to be put on hold.
“We acknowledge that this situation is hugely challenging for individuals and their families. BA and BALPA are committed to working together to find solutions during this unprecedented period and support the future of our airline.”
Willie Walsh, the chief executive of BA’s owner IAG, has taken a 20% pay cut for the rest of his contract until the end of June, according to the Financial Times.
The bosses of IAG’s other airlines, which include Aer Lingus and Iberia, are also taking a salary reduction.
Other airlines have also taken measures in a bid to weather the storm.
EasyJet and BALPA have signed an agreement to minimise the risk of pilot lay-offs in the UK over the next 18 months, including a pay freeze and asking all crew to take unpaid leave for three months.
Meanwhile, Qantas Airways has told most of its 30,000 staff to take leave and Lufthansa warned the industry may not survive without a state bailout if the pandemic continues for a long time.