British Airways has been forced to further cut flight schedules as it struggles to recruit crews quickly enough to meet renewed demand for travel after it lost nearly 10,000 jobs during the epidemic, raising fears the company could miss a heavy summer for European airlines.
The airline is cutting 10% of its flight schedules between March and October, just as its parent company IAG and other leading European groups Air France-KLM and Lufthansa predict a strong travel revival this coming summer.
BA CEO Sean Doyle said the airline had cut the equivalent to 8,000 round-trip journeys, three-quarters on short-haul lines, hitting the carrier company just as passengers were flooding with relief from travel restrictions.
The recruitment problem means IAG is now expecting flight schedules to rise to 80% from pre-plague levels this year, down 85% from the February forecast. This includes restoring almost all of its normal capacity on transatlantic routes this summer.
“Rebuilding is challenging… American suppliers had similar rebuilding problems earlier in the process, we see problems in Europe and the British industry putting the system back into operation,” Doyle said.
The company plans to recruit 6,000 workers this year after the cuts during the epidemic.
More than 20,000 people have applied for jobs at the airline, but like other parts of the industry it faces significant delays as government security screening procedures deal with a larger than usual number of cases.
The Cabinet Office said it gives priority to inspection requests from the aerospace industry, but added: “It is the aviation industry that will manage resources at airports and staff absences, especially during busy times of the year.”
Doyle partially blamed the owners of Heathrow Airport for not reopening all of its terminals quickly enough, but said he was “well aware” of the problems facing BA, which Also suffered IT failures and customer service complaints.
Despite the problems, IAG has issued an optimistic forecast, saying it is expected to return to profit this quarter, putting behind it two years and more than € 10 billion in losses.
Shares, however, fell 7% to 132.88p in the early afternoon on Friday trading in London, as timing problems and bigger losses than analysts had predicted for vague investors. The group’s shares have shed about a third of their value over the past 12 months.
Air France- KLM And Lufthansa, two other similar airlines groups in Europe that offer short and long-haul flights, posted strong updates 24 hours earlier, but they suffered fewer operational challenges.
“IAG struck an optimistic but more measured tone [compared with Air France-KLM and Lufthansa]”Said Alex Irving, an analyst at Bernstein.
The owner of Holiday Inn, InterContinental Hotels, also posted an optimistic forecast for travel on Friday, saying demand is growing in almost every market around the world.
Luis Galgo, CEO of IAG, said demand for the flight had recovered “strongly”, including Business Travel ReturnsWhich has reached the highest levels since the onset of the plague.
Doyle said business travel in BA has recovered to 65 to 70% from 2019 levels this spring.
He added that the recovery was led by the finance sector, but included accountants and consultants, and more recently the IT and pharmaceutical sectors.
“The bigger companies are ordering now [again],” he said.
IAG reported an operating loss after tax and exceptional items of € 787 million in the first quarter, down from a loss of € 1.1 billion in the previous year. Revenue rose to 3.4 billion euros from 968 million euros and cash rose slightly to 8.2 billion euros.
The losses reflected weak demand in the winter, the impact of Omicron’s corona version and costs of resuming operations, Gallego said.
IAG’s new chief financial officer, Nicholas Cadbury, said the group has no plans to turn to investors for new capital that will help it deal with a € 11.5 billion net debt pile, indicating € 8 billion in cash and the chance of returning to profit.
“When this business recovers, it spends a lot of cash,” he said.
BA cuts flights as it struggles to rehire after axing 10,000 staff Source link BA cuts flights as it struggles to rehire after axing 10,000 staff