As many as 12,000 staff at British Airways may be laid off permanently and the recovery from the Covid-19 crisis will take several years, the IAG conglomerate that also owns Aer Lingus has warned.
The proposed job losses account for over a quarter of all the staff at BA.
IAG also includes Spain’s Iberia and Vueling airlines. Like all passenger carriers, it has been hit by the industry’s worst-ever crisis amid global lockdowns that have shut world tourism and business travel.
Most of the huge financial hit taken in the first three months of the year was due to BA, “followed by Iberia and Aer Lingus, while Vueling experienced a modest increase in operating loss”, said IAG. It did not elaborate on any effects for Aer Lingus, Iberia, or Vueling.
Recovery in demand is expected to take several years, “necessitating group-wide restructuring measures”.
Other European airlines are teetering as well, including Lufthansa, which is in talks with the German government, and Air France-KLM, which plans to tap billions of bailout aid from the French and Dutch governments.
In financials, S&P Global Ratings last night downgraded the outlook for AIB, Bank of Ireland, and Permanent TSB amid the “deepening risks” of the pandemic.
Meanwhile, one of the main Irish retail groups is considering legal action against insurers over alleged their refusals to pay out to struggling shop owners on Covid-19 business claims.
Retail Excellence Ireland said almost 70% of its 2,000 retailers have business disruption policies but that insurers won’t pay out if Covid-19 was not specifically listed on the policy.