London Daily

Focus on the big picture.
Tuesday, Nov 25, 2025

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
UK Economy Stalls as Reeves Faces First Budget Test
UK Economy’s Weak Start Adds Pressure on Prime Minister Starmer
UK Government Acknowledges Billionaire Exodus Amid Tax Rise Concerns
UK Budget 2025: Markets Brace as Chancellor Faces Fiscal Tightrope
UK Unveils Strategic Plan to Secure Critical Mineral Supply Chains
UK Taskforce Calls for Radical Reset of Nuclear Regulation to Cut Costs and Accelerate Build
UK Government Launches Consultation on Major Overhaul of Settlement Rules
Google Struggles to Meet AI Demand as Infrastructure, Energy and Supply-Chain Gaps Deepen
Car Parts Leader Warns Europe Faces Heavy Job Losses in ‘Darwinian’ Auto Shake-Out
Arsenal Move Six Points Clear After Eze’s Historic Hat-Trick in Derby Rout
Wealthy New Yorkers Weigh Second Homes as the ‘Mamdani Effect’ Ripples Through Luxury Markets
Families Accuse OpenAI of Enabling ‘AI-Driven Delusions’ After Multiple Suicides
UK Unveils Critical-Minerals Strategy to Break China Supply-Chain Grip
Taylor Swift’s “The Fate of Ophelia” Extends U.K. No. 1 Run to Five Weeks
UK VPN Sign-Ups Surge by Over 1,400 % as Age-Verification Law Takes Effect
Former MEP Nathan Gill Jailed for Over Ten Years After Taking Pro-Russia Bribes
Majority of UK Entrepreneurs Regard Government as ‘Anti-Business’, Survey Shows
UK’s Starmer and US President Trump Align as Geneva Talks Probe Ukraine Peace Plan
UK Prime Minister Signals Former Prince Andrew Should Testify to US Epstein Inquiry
Royal Navy Deploys HMS Severn to Shadow Russian Corvette and Tanker Off UK Coast
China’s Wedding Boom: Nightclubs, Mountains and a Demographic Reset
Fugees Founding Member Pras Michel Sentenced to 14 Years in High-Profile US Foreign Influence Case
WhatsApp’s Unexpected Rise Reshapes American Messaging Habits
United States: Judge Dressed Up as Elvis During Hearings – and Was Forced to Resign
Johnson Blasts ‘Incoherent’ Covid Inquiry Findings Amid Report’s Harsh Critique of His Government
Lord Rothermere Secures £500 Million Deal to Acquire Telegraph Titles
Maduro Tightens Security Measures as U.S. Strike Threat Intensifies
U.S. Envoys Deliver Ultimatum to Ukraine: Sign Peace Deal by Thursday or Risk Losing American Support
Zelenskyy Signals Progress Toward Ending the War: ‘One of the Hardest Moments in History’ (end of his business model?)
U.S. Issues Alert Declaring Venezuelan Airspace a Hazard Due to Escalating Security Conditions
The U.S. State Department Announces That Mass Migration Constitutes an Existential Threat to Western Civilization and Undermines the Stability of Key American Allies
Students Challenge AI-Driven Teaching at University of Staffordshire
Pikeville Medical Center Partners with UK’s Golisano Children’s Network to Expand Pediatric Care
Germany, France and UK Confirm Full Support for Ukraine in US-Backed Security Plan
UK Low-Traffic Neighbourhoods Face Rising Backlash as Pandemic Schemes Unravel
UK Records Coldest Night of Autumn as Sub-Zero Conditions Sweep the Country
UK at Risk of Losing International Doctors as Workforce Exodus Grows, Regulator Warns
ASU Launches ASU London, Extending Its Innovation Brand to the UK Education Market
UK Prime Minister Keir Starmer to Visit China in January as Diplomatic Reset Accelerates
Google Launches Voluntary Buyouts for UK Staff Amid AI-Driven Company Realignment
UK braces for freezing snap as snow and ice warnings escalate
Majority of UK Novelists Fear AI Could Displace Their Work, Cambridge Study Finds
UK's Carrier Strike Group Achieves Full Operational Capability During NATO Drill in Mediterranean
Trump and Mamdani to Meet at the White House: “The Communist Asked”
Nvidia Again Beats Forecasts, Shares Jump in After-Hours Trading
Wintry Conditions Persist Along UK Coasts After Up to Seven Centimetres of Snow
UK Inflation Eases to 3.6 % in October, Opening Door for Rate Cut
UK Accelerates Munitions Factory Build-Out to Reinforce Warfighting Readiness
UK Consumer Optimism Plunges Ahead of November Budget
A Decade of Innovation Stagnation at Apple: The Cook Era Critique
×