UK-based airlines and other aviation employers should not proceed hastily with large scale redundancies and restructuring to employees’ terms and conditions until the Job Retention Scheme ends in October 2020 and they have had the opportunity to consider the Government’s plans to help the sector restart and recover, say MPs.
In a report exploring the crisis facing the UK’s aviation sector, the House of Commons Transport Committee says fundamental decisions about people’s livelihoods should not be made prematurely.
The aviation industry has been one of the hardest-hit since the pandemic forced a lockdown. Airlines including EasyJet, Ryanair, and Virgin Atlantic, and suppliers Rolls-Royce and Airbus, have announced thousands of job cuts.
Aviation companies have announced redundancies, despite accessing the Government’s Job Retention Scheme designed to help businesses severely affected by the pandemic to retain employees and protect the economy.
The actions of British Airways (BA) and parent company, International Airlines Group, draw particular criticism from the MPs. The committee’s view is that BA’s current consultation on staffing changes is a calculated attempt to take advantage of the pandemic to cut 12,000 jobs and to downgrade the terms and conditions of approximately 35,000 employees. The consultation ended on 15 June.
The Transport Committee found that BA had received nearly £35m from the government as of 14 May by furloughing 22,000 staff. The MPs also noted that at the end of 2019, the airline recorded profits after tax of £1.1bn and had cash reserves of £2.6bn.
Huw Merriman MP, Chair of the Transport Committee, said: “The impact of coronavirus may sadly mean that the loss of some jobs in the aviation sector is justified. The behaviour of British Airways and its parent company, IAG, is not. It falls well below the standards expected from any employer, especially in light of the scale of taxpayer subsidy, at this time of national crisis. It is unacceptable that a company would seek to drive this level of change under the cover of a pandemic.
“We looked closely at BA’s plans to consult on at least 12000 redundancies and change the terms and conditions of the bulk of its employees. Many submitted written evidence to our inquiry and we thank them. As a committee, we have sought to examine this further and drive change using the means open to us through the House, asking Urgent Questions, seeking debates, introducing legislation and putting questions directly to the Prime Minister.
“We will continue to bring pressure where we can, including the airport slot allocation process. This wanton destruction of a loyal work force cannot appear to go without sanction – by Government, parliamentarians or paying passengers who may choose differently in future. We view it is as a national disgrace.”
Trade unions Unite and the GMB are not engaging in talks with BA. Unions told the committee that BA had threatened a “fire and rehire” approach by giving redundancy notices to most of its 42,000 workers with the intention of offering jobs to a proportion of them under diminished terms and conditions.
Pilots' union Balpa has had discussions with the airline over the possibility of voluntary redundancies. Balpa’s general secretary, Brian Strutton, told the committee: “Any company using the cover of COVID to slash jobs and terms and conditions like they have needs to be called out. I have described consultation talks between Balpa and BA as hanging by a thread due to BA's decision to issue a 'fire and rehire' threat. That remains the case.”
The airline said in a statement: “We find ourselves in the deepest crisis ever faced by the airline industry - a crisis not of our making but one which we must address. We will do everything in our power to ensure that British Airways can survive and sustain the maximum number of jobs consistent with the new reality of a changed airline industry in a severely weakened global economy.”
The MPs also urged the government to abandon its 14-day quarantine rule at the end of June. The introduction of a 14-day blanket quarantine for travellers to the UK from other countries will damage the recovery of the sector and the wider economy, says the report.
Should the conditions allow in late June, the committee calls for the quarantine policy to be abandoned when it is next reviewed and urges Government to introduce a more flexible and risk-based approach to border control, using alternatives such as targeted quarantines, ‘air bridges’ and temperature screening. In defending its decision, the government should clearly set out the evidence it used to reach its decision.
Protection for passengers
Thousands of passengers who booked holidays and flights are still waiting on refunds from airlines and travel operators in accordance with their legal obligations, causing them additional stress and hardship.
The MPs say that government should consider whether protections for passengers can be built into the planned Airline Insolvency Bill. MPs also recommend that the Department for Transport and the Civil Aviation Authority, responsible for enforcing current rules, conduct a speedy review of its powers to ensure it can enforce the rights of passengers in an effective and timely way. Acknowledging the extraordinary pressures on providers, the committee asks the
Department for Transport to clarify why an extension to the legal deadlines for issuing refunds was not implemented in the UK.
Four months into the crisis, the MPs’ report says the Government’s strategy should be more developed. The Government’s Aviation Restart, Recovery and Engagement Unit is a welcome first step but the Government should bring forward a strategy for the aviation sector as soon as possible.
To stimulate demand and protect businesses, the Committee recommended a temporary six-month suspension of Air Passenger Duty payments and 12 month business rates relief for airlines and airports across the UK, as is currently the case in Scotland.
Merriman said: “Few industries have been affected more by the coronavirus pandemic than aviation. Thousands of planes, and thousands of passengers, have been grounded, resulting in a 97% reduction in passenger flights compared to the previous year. This vital sector of the UK economy could lose more than £20bn in revenue. Government must press on with a collaborative strategy for recovery.
“It is imperative that the UK Government finds a way to get aviation back on its feet. We don’t believe this fits with a blanket 14-day quarantine period for travellers to the UK. In today’s report, we recommend a more agile response. We also outline our support for a temporary suspension of Air Passenger Duty payments and support with business rates.
“Passenger confidence in airlines and travel operators, dented by unnecessarily difficult refund processes, must be rebuilt. We recommend the Government considers whether new protections for passengers should be introduced ahead of future pandemics or other extraordinary circumstances.”
The Committee’s inquiry is part of a wider look at the impact of coronavirus on UK transport. This first look at aviation did not examine the longer-term implications for air travel and MPs intend to return to this once the immediate crisis has subsided.
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