London Daily

Focus on the big picture.
Wednesday, Apr 08, 2026

BA warns of serious cost problems when furlough ends

BA warns of serious cost problems when furlough ends

British Airways has warned it is facing a "serious" problem over wage costs which will "steeply increase" when the furlough scheme ends in September.

In a memo to staff, the airline said its flight schedule and staff costs will not line up in their current form.

BA said it believed this would be a temporary problem, but it was a "serious one which we need to manage".

The warning comes alongside plans to set up a lower cost subsidiary airline at its Gatwick base.

BA halted its short-haul flights from the airport at the start of the coronavirus pandemic. It said the new subsidiary would run alongside its long-haul Gatwick routes.

'Guessing game'


In its email to staff, the airline said the furlough scheme, which ends on 30 September, had been a "huge help".

However, it added that when it ends, "our pay costs will steeply increase, and any increase in costs is bad news".

"We know that our schedule and our operating costs for the rest of this year will not line up."

The email also said that the carrier had found itself in a "constant guessing game" when it came to changes in international travel regulations.

It expressed frustration at the chopping and changing of travel rules: "We hoped that our industry would be back on its feet this year, and that the journey to pre-pandemic levels of flying would be well under way.

"But the cautious approach of governments to the easing of global travel restrictions has undermined customer confidence, and recovery remains far behind where we need it to be."

In June, it emerged that BA had to place thousands of its workers back on furlough because of delays to the restart of international travel.


The airline had brought staff back ahead of restrictions easing on 17 May, but only a few countries were added to the UK's so-called green list which do not require travellers to quarantine on their return.

Commenting on the end of furlough and continued disruption to flight schedules caused by the pandemic, BA said: "This means we're going to have to be as flexible as possible when it comes to the way we work, to help mitigate the situation over the coming months.

"We are in discussions with your trade union representatives, who are as keen as we are to find a way through the winter season and into growth next year."


In April 2020, British Airways announced it would cut up to 12,000 jobs in response to the Covid crisis.

The government has previously said in response to industry concern over the end of furlough that it recognises the challenges faced by the aviation sector as a result of the pandemic.

It says it is supporting the industry, and that it will have benefited from £7bn in government support since the start of the pandemic to when furlough ends in September.

BA's owner, IAG, has been rebuilding flight schedules as restrictions ease, and has said it will operate at about 45% of passenger capacity between July and September compared with pre-Covid levels, possibly rising to 75% by the end of 2021.

The company, which also owns Aer Lingus and Iberia, revealed a loss of more than €2bn (£1.7bn) in the six months to the end of June.

Plans for Gatwick


In its email to staff, BA said short-haul flights from Gatwick had previously been "a highly competitive market, but for us to run a sustainable airline in the current environment, we need a competitive operating model".

"Because of that, we are proposing a new operating subsidiary to run alongside our existing long-haul Gatwick operation, to serve short-haul routes to/from Gatwick from summer 2022.

Go, launched by Barbara Cassini, was BA's response to the upstart low-cost rivals
Analysis

By Rebecca Marston, business reporter

Aviation nerds will recall BA has done this trip before.

Back in the late 1990s in the infancy of low-cost, no-frills air travel, BA launched Go, based at Stansted and its rival to upstarts Easyjet and Ryanair.

Although its elegant style proved popular with passengers, it didn't last long under BA, partly because of fears it was cannibalising too much of its established business. It ended up being bought by Easyjet, which was growing fast from its own base at Luton Airport.

The low-cost model, where passengers had to print their own ticket and check in themselves, without even a hot meal on board to reward them, took some getting used to but is now the standard way to fly.

BA ditched its own hot meals along with a range of changes as it was forced to chase down its own costs to keep up with those rivals. Its forceful attempts to do so were generally met by fierce opposition from its unionised workforce.

This time, as the whole industry faces the most challenging period since its inception, it looks to have the pilots union, for one, on board. As it cuts its workforce by around a quarter in response to the pandemic, its other unions may also feel impelled to follow the new route.

"This will help us to be both agile and competitive, allowing us to build a sustainable short-haul presence at Gatwick over time."

The British Airline Pilots Association said it was "cautiously" in favour of the plan.

It told the BBC on Thursday it was in the "final stages of negotiations" with BA over pay and conditions.

Acting general secretary Martin Chalk said the move would "create a number of much needed new pilot jobs".

Newsletter

Related Articles

0:00
0:00
Close
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
Reform UK Proposes Visa Restrictions on Nations Pursuing Reparations Claims
Public Reaction Divides Over UK Decision to Bar Kanye West
Calls Grow for UK to Review US Base Access Following Concerns Over Escalating Rhetoric
UK Indicates It Will Not Permit Use of Its Bases for Potential US Strikes on Iran’s Energy Infrastructure
UK Prime Minister Defends Decision to Bar Kanye West, Questions Festival Booking
UK Accelerates Efforts to Harmonise Medical Technology Rules with United States
Wireless Festival Cancelled After Kanye West Denied Entry to the United Kingdom
Australia’s most decorated living soldier was arrested at Sydney Airport and charged with five counts of war-crime murder for the killing of unarmed Afghan civilians
The CIA’s Secret Technology That Can Find You by Your Heartbeat Successfully Locates Downed Airman
Operation Europe: Trump Deploys Vance to Hungary to Save the EU
King Charles Faces Criticism From Some UK Christians Over Absence of Easter Message
Former UK Defence Secretary Raises Concerns Over Ability to Counter Iran Missile Threat
UK Signals Non-Involvement in Iran Conflict as Trump Reasserts Firm Deterrence Stance
US and UK Strengthen Medical Device Cooperation Following Tariff Removal
Trump Backs Steve Hilton for California Governor, Highlighting Reform Agenda
UK Seeks Closer Ties With Anthropic as AI Policy Divergence Emerges Across Atlantic
Experts Warn of Evolving Extremism After Teens Arrested in UK Ambulance Arson Case
UK Convenes Talks to Safeguard Shipping Through Strait of Hormuz After Conflict Escalation
Trump Highlights Strong Leadership in Critique of UK Stance on Iran
UK Authorities Review Kanye West’s Entry Status Following Festival Backlash
UK Considers Deploying Aircraft Carrier for US Independence Day Celebrations Amid Renewed Transatlantic Focus
United Kingdom Moves to Attract AI Firm Anthropic Amid Tensions with US Defense Officials
RAF Intercepts Iranian Drones in Middle East to Defend Allied Security Interests
Labour Signals Shift on Foie Gras and Fur Restrictions to Advance EU Trade Talks
Seven Arrested Near RAF Base as UK Authorities Respond to Protest Activity
Economic Pressures Mount as Analysts Warn UK Growth Is Being Constrained by Policy Burdens
UK Green Party’s Push for Church-State Separation Sparks Debate Over National Identity
Strategic Island Emerges as Growing Challenge for United States and United Kingdom Defense Planning
Pepsi Pulls Sponsorship from UK Festival Following Backlash Linked to Kanye West
Signs Emerge of Declining Enthusiasm for Social Media in the United Kingdom
Security Alert Raised Ahead of Meghan Markle’s Planned Visit to Australia
UK Food Halls Defy Hospitality Slowdown, Emerging as Bright Spot in Challenging Market
UK Sets Firm Conditions for Military Action, Insisting on Legal Mandate and Clear Strategy
UK Medicines Regulator Launches Probe into Peptide Clinics Over Health Claims
New North Sea Drilling Unlikely to Significantly Cut UK Gas Imports, Analysis Finds
×