British Airways pilots are to be consulted on a package involving pay cuts and a series of other measures intended to protect crew jobs, with the cockpit union admitting the conditions of the deal are unlikely to be bettered. Cockpit union BALPA has been discussing ways to avoid cutting over 1,250 pilots, after British Airways embarked on a wide-ranging restructuring which threatened some 12,000 positions at the airline. The union believes compulsory redundancy will still affect up to 270 pilots, although it expects additional “voluntary mitigation” could bring the figure down further. It will consult with 4,300 pilots at the airline on the proposed package which, says the union, is “the best that can be achieved” under the “incredibly difficult” circumstances of the air transport crisis. BALPA stresses that the airline will not undertake to “fire and rehire” pilots – a term to describe dismissing crews before taking them back on reduced terms and conditions, in order to cut costs. Measures include establishing a holding pool equating to 300 pilots, on reduced pay, which will remain on standby in preparation for a pick-up in demand. This will be complemented by voluntary part-time working, voluntary severance, and voluntary external secondment. To fund the scheme pilots will take a pay cut initially set at 20% but falling to 8% over the next two years, and subsequently declining towards zero. BALPA says it is recommending the proposals to crews, and a ballot on acceptance will run to 30 July. “It is hugely disappointing that, during our extensive negotiations, British Airways would not accept the full package of mitigations we put forward,” says general secretary Brian Strutton, adding that compulsory redundancies would be a “matter of huge regret”.

Source: Cirium

Pilot union Air Line Pilots Association, International (ALPA) has again called on the US Congress to extend its payroll support program (PSP) another six months beyond the original expiry date of 30 September. Writing to the US House of Representatives on 21 July, ALPA president Joe DePete notes that airlines represent about 5% of the nation’s gross domestic product, and that mass layoffs later this year as a result of the coronavirus crisis may do permanent damage to the aviation industry and broader US economy. With the September deadline fast approaching, ALPA and other unions representing aviation workers are intensifying calls on the government to prevent the entire industry from falling off “an unprecedented employment cliff”. “Unfortunately, the expectation of a US aviation recovery has run into a resurgence of Covid-19,” DePete writes. “The already anaemic demand for travel is now trending down at the precise time that the PSP is set to expire in September of 2020. Absent of a clean reauthorisation of the program, hundreds of thousands of aviation employees will lose their jobs through no fault of their own, as travel demand will remain sluggish well into 2021.” The union is looking for an extension of the program through the end of March 2021, in order to give passenger demand an opportunity to recover from historic lows experienced earlier this year due to the global health crisis. Last week, major carriers United Airlines and American Airlines together put 61,000 employees on notice that their jobs may be in danger from 1 October. About 5,000 of those are pilots. US airlines have offered staff generous voluntary leave and early retirement packages in hopes they can avoid layoffs as the health crisis drags into the second half of 2020. So far, tens of thousands of airline workers have taken advantage of these deals. But many in the industry fear it may not be enough. “Beyond the human toll posed by these mass layoffs, the economic damage to the industry will be substantial,” DePete says. Pilots, he argues, are in a more-difficult position than other workers in the aviation business. Years of specialised initial and recurrent training as well as specialised skills make them difficult to replace if and when recovery does take hold. It usually takes 5-7 years for a candidate to advance to a position where they can land an airline cockpit job. “For pilots, who are subject to constant training and certification checks, simply returning to the industry and flying planes after long absences is not permissible and we risk losing a generation of pilot talent – leaving the United States at a global competitive disadvantage,” he adds. Airlines had seen a small resurgence in bookings in mid-June, primarily from leisure travellers. But that trend reversed toward the end of last month due to a resurgence of cases in vacation spots across southern states including Florida, Texas, Arizona and California. In response to these virus hot-spots, the metropolitan regions around New York City and Chicago imposed new 14-day mandatory quarantines for inbound and returning passengers from certain parts of the country. On 21 July, the state of New York extended that requirement to travellers from 31 states. That means passengers arriving from almost two thirds of the USA could be subject to isolation mandates. The CARES Act, passed by Congress in March, provided $58 billion for commercial airlines in grants and loans to help them through the liquidity bind that arose as a result of a sharp decline in passenger demand as the virus rapidly spread across the country and around the world. In return, airlines agreed to make no layoffs before the beginning of the fourth quarter.

Source: Cirium

Cathay Pacific will defer delivery of its Airbus aircraft by up to two years, and is in “advanced negotiations” with Boeing about delaying the delivery of the 777-9 widebody, in a bid to “produce cash savings” in the short to medium term. The deferrals on Airbus aircraft, announced in a rights issue prospectus, will affect A350-900s and A350-1000s, as well as sister carrier Cathay Dragon’s A321neos. The A350s, which were expected to be delivered between 2020 and 2021, will be delayed to 2020-2023, while the A321neos, which sister carrier Cathay Dragon and low-cost arm HK Express have on order, will be deferred from 2020-2023 to 2020-2025. Cathay has 12 A350s on order, comprising four -900s, and eight -1000s. It also has 21 Boeing 777-9s on order. Cathay Dragon and HK Express each have 16 A321neos on order. Cathay stated in a November investor presentation that these aircraft were expected to enter the respective fleets by 2024. The beleaguered carrier, which recently warned of a HK$9.9 billion ($1.28 billion) net loss for the six months ended 30 June, says that its monthly cash loss has reduced slightly after it took measures to cut costs and conserve cash. From an initial cash loss of HK$2.5 to 3 billion a month disclosed in June, the carrier states that it has now gone down to HK$1.5 billion a month, and is expected to remain at that level for the foreseeable future. Cathay, Cathay Dragon and HK Express have been hard hit by the collapse in travel demand from the corona virus outbreak. HK Express remains grounded, while Cathay and Cathay Dragon carried only 27,106 passengers – a 99.1% decline year on year. Cathay’s shareholders on 13 July approved a HK$39 billion recapitalisation plan, led by the Hong Kong government. Cathay first announced the plan, which comprises three tranches, in June. The carrier said that the recapitalisation plan was drawn up after exploring “available options”, and adds that it was necessary “to ensure it has sufficient liquidity to weather this current crisis”. Cathay’s management will also re-evaluate its business model in the longer term, and will, by the end of the year, make recommendations to its board on the “optimum size and shape” of the group.

Source: Cirium