BA in survival fight as airline rivals plead for bail-outs

Boss of British Airways has warned his 45,000 staff not to take the threat of coronavirus lightly

BRITISH AIRWAYS warned yesterday the coronavirus pandemic has caused a crisis “of global proportions like no other we have known” as governments prepared to start bailing out cashstrapped airlines.

Norwegian, Gatwick’s third-biggest airline, pleaded for an “immediate” handout after warning it was “within weeks” of collapse.

Europe’s biggest airline Lufthansa confirmed it will seek “liquidity” as the EU relaxed state aid rules. It plans to ground two thirds of its 800 planes and axe 66 daily flights to the US.

BA boss Alex Cruz sent a message to the flag carrier’s 45,000 employees entitled “The survival of British Airways”, warning that the outbreak was more serious than the financial crisis, September 11 or SARS. “Please do not underestimate the seriousness of this for our company,” he said, adding that job cuts would be needed “perhaps for a short period, perhaps longer term”.

Meanwhile, the Norwegian government announced “phase one” measures, cutting aviation taxes. “Sadly, this is not enough,” said Norwegian boss Jacob Schram. “We’re in a very demanding situation at the moment. We need exact measures to strengthen our liquidity in the short term immediately.”

Sources said the airline now faced an anxious wait before a second round of measures from Oslo officials next week, as fears persist that Norwegian will follow Flybe by collapsing under the pressure of the pandemic.

Hours after airlines appealed to British ministers on Thursday for financial help, the EU gave the Government the green light to meet some of the industry’s demands. Countries would be handed “maximum flexibility” to loosen the state aid shackles, said European commissioner Ursula von der Leyen.

The Daily Telegraph revealed that UK airlines appealed to aviation minister Kelly Tolhurst on Thursday for bridging loans to compensate them for customer payments for future bookings being withheld by credit card firms.

It was also reported last night that BA has been in talks in about “urgent financing” with banks including Bank of America, Goldman Sachs and Deutsche Bank in recent days. The banks and airline declined to comment on the report in the Financial Times.

Meanwhile, Brussels officials signed off the suspension of “use-it-or-lose-it” rules on take-off and landing slots that have forced airlines to fly “ghost flights” or be stripped of the spots.

Rafael Schvartzman, of airline trade body IATA, said a decision to suspend rules until June and not through the full summer was “disappointing”.

“Airlines are in crisis. The collapse in demand is unprecedented and airlines are struggling to match capacity to the fast-changing situation,” he said.

The aviation sector was already reeling before US president Donald Trump imposed a US travel ban on flights from Europe this week. IATA has warned airlines could lose up to $113bn (£87bn) in revenues this year.

Air France-klm bosses have also warned staff the airline will need to ram through unspecified cost cuts, which require partial layoffs.