TA lot of onlookers were standing at Narita Airport near Tokyo when a huge airplane from Europe floated in for the first time in spring 2019, painted in a funny turtle design. When the Japanese All Nippon Airlines (ANA) offered its first scheduled flight with this jet shortly afterwards, it was sold out in no time. The airline called its new A380 “Flying Honu”, named after an endangered sea turtle in Hawaii. The fans stood upside down, had themselves photographed in front of the giant plane before the first flight with A380 models or with turtle actors in kitschy costumes.
The Airbus A380, the largest airliner in the world, has always sparked enthusiasm among passengers and airplane fans, since its first flight with paying guests in 2007 with Singapore Airlines. ANA was the last of 15 airlines to get their A380 – that was just over a year ago.
Are some companies taking advantage of the current crisis to amplify their reconstruction? According to some UK parliamentarians and trade unions, the answer is yes. They point the finger at the airline British Airways, whose recent financial results indicate a loss of 790 million euros in the second quarter due to the coronavirus crisis. In the weeks and months to come, the unions fear that the company will lay off some employees to then rehire them … but with lower wages, we learn The gallery .
Hostesses, stewards, ground staff: around 30,000 employees could be forced to sign a new contract, with a falling salary, to keep their jobs. The hardest hit will be the ex-employees of the company, who benefit from multiple bonuses and upgrades. Some could lose up to 43% of their salary, warn unions.
At the end of April, British Airways had also warned that the containment measures, the cessation of activity and the economic crisis would lead to the elimination of 12,000 jobs. That’s almost a quarter of the company’s total workforce. At the beginning of August, 6,000 voluntary departures had already been recorded.
On the pilot side, finally, the unions had obtained a sharp reduction in the number of layoffs: 270 against 1,255 envisaged at the start of the health crisis. The other point of view ? A temporary salary reduction of 20%, for two years, then 8%, for an indefinite period and for all pilots. At the same time, British Airways received € 39 million from the government through the partial unemployment scheme.
But these negotiations around wages did not stop at the doors of the company. A report by the Transport Committee of the House of Commons, where the deputies sit, openly mentions a “calculated attempt to profitOf the health crisis. This report denounces the behavior of British Airways, going so far as to speak of “national shame“. Labor opposition leader Kei Starmer has called on Prime Minister Boris Johnson to take up the case. For their part, the unions, through the voice of the Unite union (which claims 1.4 million members), have called for a strike for the fall. They also raise the possibility of legal action.
Faced with these accusations, the British company defends itself. “The pandemic destroys jobs in all sectors“, She launches, recalling that the coronavirus crisis is”the biggest challenge the company and industry have ever faced“. So far, Air France-KLM has announced the possibility of cutting up to 12,500 positions, Lufthansa, 22,000, American Airlines, 25,000, among others. But none of these companies announced a reduction in wages.
The 747, a mythical ship of Boeing, he saw his slow agony accelerate with the pandemic of the coronavirus up to push British Airways to announce, after other companies, the withdrawal of its fleet, like the Airbus A380.
Who announced a recall?
British Airways’ announcement on Friday follows the example of Lufthansa in April, it announced the recall of five Boeing 747-400s, seven A340-600s, and six A380s, from a fleet of 32 Boeing 747s (of all types) and 14 A380 aircraft.
This withdrawal was precipitated by “the environmental impact and economic disadvantages of this type of device,” the group said.
Air France, which had already decided to stop flying the A380 at the end of 2022 mainly due to its excessively high operating costs, accelerated the movement with the crisis caused by the coronavirus and the announced slow resumption of traffic.
Australia’s Qantas this month accelerated the recall of its 747s announced last year, and made a farewell flight with the last three 747s. The A380s will also be recalled, the company said.
Twelve 747 of the 23 that Korean Air owns currently circulate, 11 freighters and a single passenger transporter, the company said does not foresee any recalls.
At Air India, four 747s are used to transport personalities or evacuate, a source within the company says.
In December 2017, Delta Air Lines, the last U.S. company to operate 747, removed it from its passenger transportation fleet.
The coronavirus, guilty or co-accused?
“The coronavirus is an accelerator,” explains Rémy Bonnery, an aeronautical expert at the firm Archery Consulting. The pandemic brought most of the world’s aircraft to a halt on the 50th anniversary of 747, an aircraft of which 1,571 models were commissioned throughout its history.
According to him, both the Boeing 747 and the Airbus A380 “are much more difficult to manage within a fleet. They are not the easiest aircraft to fill, they have a higher level of consumption,” he says.
Launched in 1970, the Boeing Jumbo Jet can carry more than 600 passengers in some configurations and the A380 up to 853.
The A380 offers the best cost per seat on the market as long as it is 100% full, Sébastien Maire, an aeronautical expert at the Kea & Partners cabinet, recently told AFP. What did not happen in many destinations.
The end of the air giants?
“It is clear that in the coming years it will not go to very large planes,” says Bonnery.
Emirates, the A380’s largest customer with its 115 aircraft, announced that it continues to operate the aircraft that made its first flight just 15 years ago. But the company’s president, Tim Clark, believes that with the pandemic, an air giant like the A380 will see its end.
For its part, Airbus announced in February 2019 the delivery stop for 2021 of the A380, with 251 units ordered by 14 customers, while Bloomberg claimed, in early July, that the latest 747-8, the latest version of the American Jumbo that It is especially interesting in the loading version, it should leave the factory in two years, without confirmation from the manufacturer.
Despite its detractors, the legendary Boeing aircraft can still count on the support of the President of the United States and his Air Force One.
The White House is waiting for two 747-8s, bigger, more modern, faster, and less fuel-consuming than the current 747-200, 30 years old and costing $ 180,000 an hour.
Dhe Corona crisis hit aviation badly; In Europe alone, there were 90 percent fewer take-offs and landings over several months than before the pandemic. Many passengers have to stay on the ground – and therefore cannot collect miles.
The situation for frequent flyers is not entirely hopeless. The mileage expert Alexander Koenig knows ways to secure the coveted frequent flyer status even under these difficult conditions. However, not every airline is equally customer-friendly.
Dusseldorf Lufthansa and numerous other airlines are secretly using a trick to massively delay payments for canceled flights. The Handelsblatt learned this from several German air travel agencies. “165 out of 180 airlines simply switched off the usually automatic reimbursement at the beginning of the corona crisis,” reports Rainer Klee, head of AER, the world’s largest ticket wholesaler with around 1,000 affiliated agencies.
Tourism consultant Jörg Lesser, member of the flight committee of the German Travel Association (DRV) and until recently himself a travel agency owner, confirms: “Until the corona crisis in the event of flight cancellations, the funds were automatically transferred back after a week or two, via agency reservation systems such as Saber or Amadeus. “At most, a low single-digit percentage of all refunds was also checked by hand. This has been over since the outbreak of the pandemic. “Airlines like Lufthansa now process all of their customers’ entries manually.”
Air travel experts were accordingly annoyed on Monday by an interview with Lufthansa CEO Carsten Spohr. In the “Frankfurter Allgemeine Sonntagszeitung”, the Lufthansa CEO cited the workload of his employees as the reason why hundreds of thousands of customers are still waiting for their money. “Ticket refunds are usually isolated cases, now there are tens of thousands a day,” Spohr had asked for understanding. “Every customer has to call us or to initiate a refund online, and of course that takes hundreds of thousands of customers.”
The Lufthansa boss rejected that the repayment was deliberately delayed in order to secure one’s own liquidity. They have now even “increased the resources significantly so that the processing speeded up”.
Only when asked by the Handelsblatt did a Lufthansa spokesman confirm that there was previously an automatic repayment mechanism. However, the reason why this was switched off remains questionable. The spokesman literally: “The changeover in the system was due to the extraordinarily high volume of requests that made it necessary to adjust the reimbursement processes.”
“Everyone is looking at the market leader”
Lufthansa is not the only airline that is holding up its customers by cutting the IT system. In the tactics of payment delays, tourism consultant Lesser observes, however, she is the “most intense”. Smaller providers such as South African Airways, Air Montenegro and Turkmenistan Airlines have been noticed in a similarly negative way in the past few weeks.
AER boss Klee believes that airlines like Air France and KLM are also tricky in holding back their customer deposits, and are closely related to Lufthansa. “Everyone is looking at the market leader,” he says, “and he set a bad example.”
By contrast, British Airways and the US airlines paid back customer credit much more quickly. The latter had a good reason to do so: if they fail to comply with their legal obligations, unlike their competitors in Europe, they may lose their land rights at home. Lufthansa competitors Ryanair, Easyjet and Tuifly, which started in Germany, were also denied the trick with the computer booking system – but for another reason: They had not used the repayment mechanism of the common booking systems before the crisis, the industry says.
The outstanding repayment amounts are huge. At Lufthansa alone, they amount to 1.8 billion euros, the crane airline reported at its virtual general meeting on May 5. Around 100,000 of their customer inquiries were processed via AER, the Bielefeld ticket dealer calculated, of which 25,000 to 30,000 have so far been paid out. “Since the state aid was approved last week,” observes AER founder Klee, “repayments have been a little faster.”
In other air travel agencies, none of this has been noticed. At his agency there were around 200 reimbursement requests, a holder explains on request. Only two cases have been approved to date. “They were the two cheapest tickets,” he says, “although little speaks for a coincidence.”
The tour operators are suffering
Sufferers are – even more so than private customers – Germany’s tour operators. Because they had to transfer the down payments back to their holiday customers, many now lack the liquidity due to the stubborn refusal of the airlines. At least four package tour providers have applied for bankruptcy in recent weeks.
The legal situation in Germany is clear: Deposited funds must be reimbursed no later than seven days after the flight was canceled, as determined by the Civil Code.
The fact that the airlines were able to successfully avoid this provision was due to the fact that the administration of justice had come to a standstill. For two months, the courts postponed corresponding appointments for a quality hearing because the judiciary feared contagions with the corona virus. “The lock has been lifted again,” says Marina Sartison from the Düsseldorf law firm Schumacher + Partner, “but now there is a traffic jam.”
Anyone who waits longer for their money as a passenger is advised to hurry up. Although the passengers rarely needed an appointment for an interview because of the mostly clear cases, she says, the plaintiff usually goes in advance. “If the airline goes into bankruptcy,” warns Sartison, “the traveler not only stays on his ticket, but also his attorney’s fees.”
More: Lufthansa CEO Spohr announces “return flight guarantee” in corona crisis.
The crisis arising from the coronavirusIt has blown up the plans of the IAG group, owner of Iberia, British Airways and Vueling, among others.The aeronautical holding company, immersed in a succession process in the dome and with the pending purchase of Air Europa, lost 1,683 million euros in the first quarter of the year. Last year, in the same period, he had earned 70 million.
Covid has hit the air sector hard, halting virtually since travel restrictions began around the world in March and passenger traffic plummeted.The impact is unprecedented. Not even after the attacks of September 11 in the USsuch a brutal blow was suffered.
In fact, until mid-March, IAG operations were running like a year ago and it was in the last weeks of this month that most of the losses occurred, as IAG CEO Willie Walsh acknowledged yesterday. whoLuis Gallego, current president of Iberia, replace in September.
This relay was scheduled for June, but was postponed due to the Covid crisis. Gallego acknowledged yesterday in a telephone press conference that this year passenger transport capacity will be reduced by around 50% and that the levels prior to this crisis will not be recovered until 2023 at the earliest, he admitted.The group prepares to fly, at the earliest, in July.
The uncertainty is great and, in fact, the sector does not know when restrictions on tourist travel will be lifted. In Spain, the summer campaign at the international level is practically lost, since tourists are not expected to come until autumn.
In this context, the Covid compel airlines to restructure their organizations.In the case of IAG, they will adjust the workforce to capacity, Luis Gallego acknowledged., who did not go into details about this cut, but did point out that with current employment levels and those expected in the short term there will be an excess of staff.
The workers of the airlines that are part of the aeronautical group (and those of most European companies) have been in an ERTE (Temporary Employment Regulation File) situation, practically since the Covid crisis erupted. Iberia presented an ERTE for 14,000 workers and Vueling for 3,800. British Airways announced a few days ago its intention to cut 12,000 workers.
Given the stoppage of activity and the lack of liquidity,some companies have already applied for aid or access to credits guaranteed by the State. Some passes have already granted them. This is the case of France, and the Netherlands, which have already announced millionaire aid for Air France and KLM, associated since 2004. The latter also presented its results yesterday, with losses of more than 800 million euros.
Air France-KLM has received $ 7 billion from a rescue sponsored by the French government, while continuing to negotiate with the Netherlands to deal with the crisis.
Iberia and Vueling have already signed two syndicated credits with various banks for 1,010 million to face the crisis.There will be aid and, in this context, the passes will focus mainly on the flag airlines,in the big ones, says Rom Andreu, an expert in the sector and professor at the EAE Business School.
Despite being necessary,These grants question the impact it may have on free competitionwithin the sector, more in a future in which closings and mergers are expected. In other words, they would leave others, such as Ryanair, Norwegian, at a competitive disadvantage …
For the Asociación de Lneas Areas (ALA), the case of Spain is different, since it is more fragmented, there is not a single flagship company, explains Javier Gndara, president of ALA.They believe that this injection should be for all Spaniards, such as Vueling (which, in fact, has more passenger traffic than Iberia, Air Nostrum, Volotea, Air Europa …).
The Minister of Industry, Commerce and Tourism, Reyes Maroto, recently stated that airlines should receive specific support in order to guarantee viability.
Just yesterday, Lufthansa airline confirmed that it is in talks with the German government about a rescue package of 9,000 million euros with which the State could get a 25% stake in the company. Other airlines in the Lufthansa group, Swiss firms Swiss and Edelweiss, already have a commitment from the Swiss federal council to receive state guarantees for 85% of loans worth 1,419 million.
The Italian government, for its part, inject at least 3,000 million into the new Alitalia, which will be nationalized after spending three years in bankruptcy administration for its financial problems, confirmed yesterday the Italian Minister of Economic Development, Stefano Patuanelli.
London The low-cost airline Ryanair is preparing a drastic job cuts. Negotiations to cut up to 3,000 jobs – primarily pilots and cabin crews – would begin with unions in July, the company said in a message on Friday. A total of around 17,000 people work for the Irish airline.
In an interview with the Handelsblatt a few days ago, Ryanair boss Michael O’Leary had already announced such a plan. “We will have fewer flights. We will need fewer staff there, ”he said. That ten to 20 percent of the jobs are lost is “almost inevitable”.
Ryanair employees are not the only ones who have to fear for their job: 12,000 jobs are under scrutiny at British Airways, and Lufthansa boss Carsten Spohr has announced that they want to lay off 10,000 employees.
Airlines have had to leave their planes on the ground since March due to travel restrictions in the wake of the corona pandemic. Therefore, they face the problem that they do not take any money, but at the same time have to book costs.
Almost all of them have used state support such as short-time work benefits – but for some companies that is not enough. For example, Lufthansa is negotiating in parallel with the governments for government aid in Berlin, Vienna, Brussels and Bern.
Allegation of distortion of competition
Ryanair boss O’Leary makes this angry. According to his projections, airlines – especially Lufthansa, Air France-KLM, Alitalia, SAS and Norwegian – receive and negotiate a total of over 30 billion euros, which are “contrary to EU rules”. The manager criticizes the competition.
All societies should receive the same aid. For example, you could cut some taxes and duties – for the entire industry, he demands. However, the current approach is “selective doping” by some airlines. By contrast, Ryanair would go to court, he announced.
The anger is beginning to be understood, says analyst William Ryder of Hargreaves Lansdown. It would be much more difficult to keep up with competitors who can rely on state support.
The Dublin airline expects that air traffic will start slowly in July. A recovery of European air traffic to the level before the corona crisis can be expected at the earliest in summer 2022, O’Leary dampened expectations.
In the current financial year until the end of March 2021, Ryanair expects fewer than 100 million passengers, 35 percent less than originally planned. In the first quarter, with less than 150,000 passengers, it was 99.5 percent below the plan, and in the second quarter the number of passengers should not even be half of the previously expected 44.6 million.
Review of growth plans
Nevertheless, the airline manager does not expect that flying will become more expensive: O’Leary predicts that the airlines will face a price war, fueled by the government support of some airlines.
Given the poorer prospects, O’Leary announced plans to review its growth plans and aircraft orders. Talks would be held with the US manufacturer Boeing.
Ryanair does not want to make any forecasts for the current financial year. But for the current first quarter, one calculates with a net loss of over 100 million euros, said Ryanair, and losses are also expected in the second quarter. Nevertheless, O’Leary emphasized that the Irish airline could survive the crisis.
But he himself also accepts losses: his salary has already been cut by 50 percent for April. Now he wants to accept such a cut by the end of the financial year. The figures for the last financial year at the end of March 2020 are scheduled to be published on May 18.
Meanwhile, the airline threatens to close its Austrian subsidiary Lauda in Vienna. Lauda jets would be replaced with Ryanair planes if the workforce were not willing to cut wages and new employment contracts, O’Leary said in an interview with Reuters on Friday.
The talks between Lauda and the union are difficult. “We set a deadline of May 20th,” said O’Leary. If the employees refused, the Lauda base in Vienna would be closed. “When we close Lauda, she comes back as Ryanair: bigger and more aggressive than Lauda has ever been.”
With agency material from Reuters.
More: British Airways parent IAG has 12,000 jobs on the brink. Read more here.