British Airways ‘may not operate at Gatwick after pandemic’

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British Airways at Gatwick Airport

British Airways has told its staff that it may not reopen its operation at Gatwick airport after the coronavirus pandemic passes.

A leaked memo written by the head of BA’s Gatwick hub, Adam Carson, was written after BA announced a consultation that could result in the loss of up to 12,000 jobs.

BA’s Gatwick operation, which is currently suspended amid travel restrictions, is about a fifth the size of its hub at Heathrow where it has a dedicated terminal.

The letter, seen by Travel Weekly, said: “As you know, we suspended our Gatwick flying schedule at the end of April and there is no certainty as to when or if these services can or will return. Today’s announcement outlines how we propose to ensure we are competitive and sustainable for the future, that we are the right size to meet demand and that we can be flexible and resilient to change.”

It also points to a “reduction in the size of our cabin crew community” and changes to pay and reveals that BA’s ground staff at Gatwick are expected to be transferred to BA subsidiary Gatwick Ground Services.

In a separate letter to pilots, seen by the BBC, BA said it cannot rule out suspending the rest of its Heathrow operation. The letter is quoted as saying that some of the airline’s rivals abroad are facing tough competition and reportedly suggests that a quarter of BA’s 4,300 pilots are set to lose their jobs.

BBC News said the letter from senior management says: “We need to ensure that our remaining operation is efficient, flexible and cost-competitive to enable us to survive in an increasingly lean and unpredictable industry.”

Travel Weekly has approached British Airways for comment.

On Tuesday, British Airways parent IAG said it could make up to 12,000 of the airline’s staff redundant in a restructure.

British Airways chief executive Alex Cruz said the “outlook for the aviation industry has worsened” over recent weeks, leaving the airline with no choice but to take action and “act decisively”.

Unions have criticised the move.

Responding to news that BA was considering its position at Gatwick, Brian Strutton, general secretary at pilots union Balpa, said: “As far as Balpa is aware, there is no truth in the rumour that British Airways will pull out of Gatwick and there has been no indication of that from BA to us. However, it is on our list of questions to ask them.”

DOT orders airlines to pay out refunds

DOT orders airlines to pay out refunds
Photo Credit: Oliver Le Moal/Shutterstock

The Transportation Department on Friday issued an enforcement notice, telling airlines that they remain obligated to pay out refunds for flights that they have cancelled.

The order was prompted by an increase in complaints from ticketed passengers who have been denied refunds, the DOT said. Airlines instead are often giving travel vouchers.

“The longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier’s control,” the DOT said in the order. “The focus is not on whether the flight disruptions are within or outside the carrier’s control, but rather on the fact that the cancellation is through no fault of the passenger.”

The unprecedented schedule cuts airlines have made in response to the Covid-19 crisis has left the airline industry with a $35 billion refund liability worldwide, according to a recent IATA estimate.

With airlines already struggling due to enormous losses in revenue, IATA has been lobbying governments to suspend refund requirements. Thus far Canada, Germany, the Netherlands and Colombia have issued favourable rulings for airlines.

Airlines have also acted individually to make refunds more challenging to obtain. Some have stopped processing them entirely while many others are making it difficult for customers to find information on applying for refunds. In the U.S., United recently altered its refund process so that international ticket holders will have to wait a year to get repaid for a flight cancelled by the airline.

In addition, 33 airlines (as of April 3) have unilaterally suspended refunds through the GDSs or ARC’s Interactive Agent Reporting system, forcing travel advisors to deal directly with the carrier.

Meanwhile, the sheer volume of refund transactions facing airlines that are still processing them in the GDS has compelled ARC to delay its weekly remittance schedule. ARC will now turn over refunds to agencies 10 days after the Sunday end of each business week, rather than five. That decision, said ARC’s managing director of airline services Chuck Fischer, was prompted by the fact that with current refund volumes, many airlines simply can’t go through their procedures fast enough to meet the five-day schedule.

Fischer said ARC doesn’t like that some airlines have cut off GDS refund processing, “but we can’t stop them from doing that.”

IATA, which oversees agent channel billing and settlement for most of the world other than the U.S., has no such reluctance. In an open letter to travel agents Thursday, IATA director general Alexandre de Juniac said that the best solution right now for airlines and agents alike is for governments to suspend refund requirements.

“This would remove the pressure that is currently on agents to issue cash refunds at a time when airlines are making decisions based on their own need to preserve cash,” he wrote.

The DOT’s enforcement notice pushes back against such airline efforts. The department stated that it considers any contract of carriage provision by an airline that denies refunds for cancellations or significant schedule changes to be a regulatory violation. (The DOT does not specifically define “significant schedule change.” A DOT spokesperson said it is determined on a case-by-case basis.) The notice applies to both U.S. and foreign carriers that operate in the U.S.

The department said that for now, it will hold off on enforcement action against airlines that have provided travel vouchers in lieu of refunds to travellers with cancelled flights, but only if they meet three conditions:

• Carriers must contact passengers to tell them they have an option for a refund.

• They must update contacts of carriage to make refund rights clear.

• They must brief all relevant personnel on the circumstances in which refunds should be made.

Coronavirus: Slump in-demand set to cost airlines almost $30bn

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A slump in demand due to the coronavirus outbreak is set to cost the global airline industry $29.3 billion in lost revenue this year.

The bulk of the revenue loss – $27.8 billion – will hit carriers in the Asia-Pacific region, as Iata warned that 2020 would be a “very tough” year for the sector.

An estimated $12.8 billion will be lost in the Chinese domestic market alone with those outside the region expected to lose $1.5 billion in revenue, the airline trade body calculated.

The total forecast drop in demand of 4.7% would wipe out expected growth this year, resulting in a 0.6% contraction in passenger demand for the year.

This would represent the first overall fall in demand in more than a decade.

The estimated impact of coronavirus assumes that the centre of the public health emergency remains in China.

If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger, according to Iata.

The estimates are based on a scenario where coronavirus has a similar impact on demand as was experienced during the SARS outbreak in 2003.

“That was characterised by a six-month period with a sharp decline followed by an equally quick recovery,” Iata said.

“It is premature to estimate what this revenue loss will mean for global profitability. We don’t yet know exactly how the outbreak will develop and whether it will follow the same profile as SARS or not.

“Governments will use fiscal and monetary policy to try to offset the adverse economic impacts. Some relief may be seen in lower fuel prices for some airlines, depending on how fuel costs have been hedged.”

Iata director general and chief executive Alexandre de Juniac said: “These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority.

“Airlines are following the guidance of the World Health Organisation (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained.

“The sharp downturn in demand as a result of COVID-19 (coronavirus) will have a financial impact on airlines – severe for those particularly exposed to the China market.

“We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the global financial crisis of 2008-09. And that scenario would translate into lost passenger revenues of $29.3 billion.

“Airlines are making difficult decisions to cut capacity and in some cases routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines.”

De Juniac called on governments to provide support. He said: “We have learned a lot from previous outbreaks, and that is reflected in the International Health Regulations (IHR). Governments need to follow these consistently.”

He added: “Airlines and governments are in this together. We have a public health emergency and we must try everything to keep it from becoming an economic crisis.”

Iata medical advisor Dr David Powell advised: “If you are sick, don’t travel.

“If you have flu-like symptoms, wear a mask and see a doctor. And when you travel wash your hands frequently and don’t touch your face.

“Observing these simple measures should keep flying safely for all.”