How low can you go? British Airways has told its lowest-paid cabin crew that they won’t now be paid a performance-related bonus which they were meant to receive at the end March – the decision to cancel this year’s bonus is a direct result of cost-cutting measures because of the COVID-19 pandemic according to people familiar with the matter.
The decision to withdraw the bonus is likely to infuriate unions who are currently negotiating with British Airways in an attempt to save as many jobs as possible. Last week, the airline’s chief executive Alex Cruz warned there would be redundancies across the business in a battle that he described as the “survival of British Airways”.
Cruz, 54, who previously headed low-cost Spanish airline Vueling, has so far refused to take any form of pay cut and is understood to be set to receive a substantial bonus for the airline’s performance in 2019.
Employees across the business had already been told they wouldn’t receive a company-wide bonus because of a pilots strike last year despite near-record financial results. However, the bonus for so-called ‘Mixed Fleet’ cabin crew was linked to a performance incentive scheme and sources claim was still set to be paid out.
British Airways’ parent company, IAG, reported a profit €3.2 billion for last year, while IAG’s chief executive Willie Walsh will still receive an £887,000 bonus. Walsh received a total remuneration package of over €3 million last year, although he has agreed to a 20 per cent pay cut of his basic wages for the next four months.
In 2017, a union which represents the lowest-paid Mixed Fleet cabin crew said its members were earning “poverty pay” and led a wave of strike action in an attempt to earn better working conditions. The union threatened further walk-outs this year before finally agreeing to a deal with the airline.
Yesterday, it was revealed that pilots at the airline had agreed to take four weeks of unpaid leave in April and May. The deductions will be spread over the next three months and would help address “the immediate threat to the business”.
In an unprecedented move, the British government yesterday said it would cover up to 80 per cent of wages for workers who are furloughed without pay. The announcement was aimed to stop employers from making mass redundancies because of the COVID-19 crisis.
