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Sunday 13th of June 2010
October 6, 2009    

British Airways to axe 1,700 cabin crew jobs and freeze pay

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by Kay Murchie
”British

There is more turmoil for the airline industry today after British Airways (BA) continues to slash costs by wielding the axe on 1,700 cabin crew members and a two-year pay freeze.

The airline admitted during the summer it was fighting to survive and has since been looking at ways to cut costs.

BA, like many others, is struggling to stay afloat during the global economic downturn which has led to a slump in demand. Many airlines have been forced out of business as fewer people are travelling by air.

The airline has been in lengthy discussions with unions and staff about cutting costs for many months.

In June this year, the airline announced a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year. The loss was the biggest since the company was privatised in 1987.

In a statement today, the airline said: “Revenues are down, so we must reduce costs and restore profitability. Thousands of staff across the airline have already made contributions to the cost reduction programme.”

“Without changes, we will continue to lose more money with every month that passes. It is essential we make ourselves more efficient if we are to ensure our long-term survival,” BA added.

However, the move was criticised by the Unite union who warned that there will be more job losses to come.

As devastation sweeps across the industry, it was announced last month that Japan Airlines had asked the Government for public funds to strengthen its capital base and save it from collapse.

The news came just a week after the loss-making carrier announced plans to cut its operating schedule and reduce headcount by almost 7,000.

In the same week, it was announced that Russian airline Aeroflot would reduce headcount by 13% - around 2,000 jobs in the next six months.

The airline, which is 51% government owned, said profits had dived amid higher fuel prices and losses at its cargo operations, which declared bankruptcy in June.

In July, Aeroflot announced that its profits for the full 2008 year had plunged by 88% compared to a year ago.

In a further blow to the industry, the International Air Transport Association recently raised its forecast for losses across the whole industry to £6.9 billion ($11 billion).

Finally, returning to BA, the airline is expected to announce a hefty loss for the second consecutive year.

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