Airline Staff Redundancy and the Coronavirus Crisis

Article by Saima Salsabil

Due to the ongoing pandemic, several popular airline companies such as Emirates and British Airways have had to make their airline staff redundant. International Airlines Group (IAG) stated that it had plunged to a loss of €535m (approximately £465m) in the first three months of this year – with all the damage being done in March. In the same period last year, the airline group made a profit of €135m. IAG also revealed it had made a one-off loss of €1.3bn, as the result of taking out contracts to hedge against the possibility of rising oil prices acting as an extra factor to its losses other than the pandemic. Though this can be analysed with the perception of the companies and their economic situation in mind, it is essential to discuss the legality of the substantial redundancies that followed within the airline industry. It can be inferred that the financial loss incurred by these companies would lead to the need to decrease costs and operational expenses, often leading to the decision of redundancy of staff. However, it is essential to understand whether the pandemic is being misused by these companies to make staff redundant, irrespective of whether or not it is legal to do so.

As per FlightGlobal, Cross-party parliamentarians in the UK have criticised British Airways’ restructuring measures, accusing the airline of a ‘calculated’ attempt to use the crisis to weaken employees’ terms and cut jobs. This is an important factor as it highlights the misuse of the situation to attain personal benefits.

The Transport Select Committee’s Inquiry has issued a harsh verdict against the airline, calling its attitude towards personnel a ‘national disgrace’. At the moment, the reputation of the airline, as well as its future, is being put at risk. The Committee has further stated that it is unethical for companies of such size to be making staff redundancy as they are better equipped to handle these situations, unlike small airlines such as Iberia and Vueling, who are feeling the impact more significantly.
In order to understand this issue of legality more clearly, it is crucial to comprehend that the airline sector was struggling even before the pandemic. This will be discussed with reference to two important factors.

The first factor being that the airline companies declined any government support with relation to the financial constraints of the pandemic. Therefore, they implied that they were economically stable enough to survive alone. However, the second factor seems controversial as these companies made staff redundant anyway without an adequate time period to let these individuals find other jobs. The lack of notice has turned out to be a key criticism od the behaviour of airlines. In the sense that if they claimed to be economically stable enough to ensure an ethical protocol of redundancy and refuse government support, why were then sudden redundancies risking the future for the employees approved to take place?
The leader of the Unite Union described British Airways’s decision as heartless, and a ‘stab in the back’, saying it was ‘entirely at odds with the course of action followed by our European competitors as they seek a way through the coronavirus crisis’. This is a controversial issue, as the airline could easily ask for funds just as Lufthansa did from its German government, but British Airways chose not to do so. A strong reason with relation to this can be that the airline sector was never capable of asking for large grants and that it was always making marginal profits.

With relation to such behaviour from the companies, the other reason can be that they are trying to curb the costs of making the business survive by cutting down employment and stating the reason to be the pandemic. Concerning the discussed evidence and the debate covered by many news sources, the latter is more likely. Once the pandemic is over, and before taking any drastic decisions regarding redundancy, the legality of such choices by the airline companies must be checked upon by the UK courts for better answerability. This is to prevent unfair dismissal as well as better preparation for a crisis in the future in terms of economic efficiency and fairness within the society.