British Airways is proposing to outsource work being done by at least 450 employees it is making redundant. The Labour party said the proposals were “disturbing news” and called for the government to scrutinise the plans. The airline, owned by International Airlines Group (IAG), is also considering closing its operation at Heathrow’s Terminal 3 completely and shrinking its footprint at Terminal 5.
Terminal 3 – which operates BA short-haul routes across Europe and long-haul destinations including Cape Town and Miami – carried about 15% of BA’s Heathrow traffic before the pandemic. Terminal 3 has been mothballed during lockdown, with all BA flights running from Terminal 5 on dramatically reduced schedules.
BA, which has received state aid worth hundreds of millions of pounds, proposed cutting as many as 12,000 jobs last month in response to the coronavirus pandemic. Among the thousands of job cuts, the proposals include plans to make at least 450 workers at Heathrow redundant before outsourcing the work they did, according to a person with knowledge of the proposals.
BA has said job cuts are necessary because passengers numbers are expected to be significantly lower for as long as four years, meaning demand will be lower. Moody’s Investor Service downgraded its rating on IAG and BA debt from investment-grade to junk bond status – meaning it faces higher borrowing costs – underscoring the financial difficulties facing the airline sector with the vast majority of planes still grounded.
However, the proposals to outsource the jobs of furloughed workers performing operations still required by the airline prompted criticism. Jim McMahon, the shadow transport secretary, said: “The government should have done more to protect these jobs. We cannot see roles which are currently paid through the job retention scheme outsourced.”
Jobs at risk in the outsourcing proposals include ticketing services, returning lost baggage to passengers and planning the balance of weight in the plane, known as centralised load control. Load control is currently carried out by teams in offices in London and Prague. The team in the Czech Republic is run by Air Dispatch, a third party supplier who would become a prime contender for some offshoring work.
The outsourcing and potential offshoring proposals come despite IAG receiving British government support worth hundreds of millions of pounds. IAG has borrowed £300m from the Bank of England’s Covid corporate finance facility. The government is paying 80% of the salaries (up to £2,500 per month) of 30,000 furloughed BA workers, support worth £35m to the company in April alone.
