London Daily

Focus on the big picture.
Monday, Mar 16, 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
King Charles and Queen Camilla Share Personal Tributes to Their Mothers on UK Mother’s Day
Prince William Honors Princess Diana with Mother’s Day Tribute
UK Economy Stalls in January as Households Cut Back on Eating Out
AI-Generated Singer Becomes Viral Voice for Iranians With New Anthem
London Private Club Founder Plans Exclusive Palm Beach Venue Near Trump’s Mar-a-Lago
Ed Davey Urges Britain to Build Fully Independent Nuclear Missile Capability
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
US Treasury Links British Polo Patrons to Alleged Venezuelan Oil Proceeds Laundering Scheme
Hundreds Gather in London Despite Ban on Annual Pro-Palestinian March
Two Dead and Multiple Students Seriously Ill After Invasive Meningitis Outbreak at UK University
UK Considers Deploying Ships and Mine-Hunting Drones to Reopen Strait of Hormuz
Starmer and Trump Discuss Urgent Need to Reopen Strait of Hormuz Amid Escalating Iran Conflict
Prince Harry and Meghan Markle’s Planned Australia Visit Draws Mixed Reaction From Local Communities
Trump Calls on France and UK to Help Safeguard Strait of Hormuz Shipping Route
Boris Johnson Labels Bitcoin a ‘Ponzi Scheme’, Sparking Debate in Crypto World
UK Considers Targeted Aid for Vulnerable Households as Energy Costs Rise
Stellantis Urges Immediate Review of UK Electric Vehicle Sales Targets
Home Office Reverses Course to Allow Some Dual Nationals to Enter UK Using EU Passports
Reform UK Proposes Replacing Top Civil Servants With Officials Aligned to Government Agenda
Netflix Adds Critically Acclaimed ‘Best Film of 2025’ With Perfect Rotten Tomatoes Score
‘The Sums Don’t Add Up’: UK Farmers Hit by Soaring Costs as Iran War Disrupts Global Supplies
Confidential UK Biobank Health Records Found Online After Researchers Accidentally Expose Data
Trump Urges Britain and Allies to Deploy Warships to Safeguard Strait of Hormuz
Trump Urges Britain and Allies to Deploy Warships to Safeguard Strait of Hormuz
Middle East War Highlights Strategic Importance of Strong UK–Ireland Cooperation
Weak Growth Signals UK Economy Was Faltering Even Before Middle East Energy Shock
Marks & Spencer Tops UK Fashion Retail Rankings as Most Considered Brand
United States Launches Trade Investigation Into Allies Over Forced Labour Practices
United States Launches Trade Investigation Into Allies Over Forced Labour Practices
Russia Accuses Britain Over Storm Shadow Strike as London Reaffirms Ukraine’s Right to Self-Defence
Russia Accuses Britain Over Storm Shadow Strike as London Reaffirms Ukraine’s Right to Self-Defence
Royal Navy to Acquire Twenty Uncrewed Surface Vessels for Autonomous Warfare Testing
Russia Summons British and French Envoys After Ukrainian Storm Shadow Strike on Strategic Facility
Starmer Confirms Britain Will Maintain Sanctions on Russia Despite U.S. Policy Shift
UK Moves to Refine AI Definition in Investment Security Reform
UK Economy Stalls in January as Growth Unexpectedly Falls to Zero
Asian Energy Security Tested as Strait of Hormuz Disruption Threatens Oil Supplies
Iran Sets Three Conditions for Ending Regional War as Diplomatic Efforts Intensify
Tesla Secures Approval to Supply Electricity Directly to Homes Across Britain
Prince William Delivers Tribute to Australia’s Naval Alliance Amid Renewed Royal Spotlight on the Country
UK Foreign Secretary Travels to Saudi Arabia to Reinforce Support for Regional Allies
Putin’s ‘Hidden Hand’ May Be Assisting Iran in Conflict With Trump, UK Defence Secretary Warns
UK Sets April Deadline for Tech Platforms to Strengthen Online Protections for Children
Elon Musk Moves Into Britain’s Energy Market as Tesla Wins Licence to Supply Power
UK Watchdog Warns Fuel Retailers Against Profiteering Amid Iran War Price Surge
Report Claims Iran Used UK Charity Network to Expand Influence
United States and United Kingdom Establish Joint Standards for Counter-Drone Technology
Iran May Be Laying Naval Mines in Strait of Hormuz, UK Warns Amid Escalating Gulf Tensions
US Deploys Bunker-Buster Bombs to UK Airbase as Iran Conflict Intensifies
×