British Airways warned that its survival was at stake on Friday as its CEO told staff of plans to cut jobs and ground aircraft to tackle the “worsening situation” caused by coronavirus.
Chief Executive Alex Cruz told BA’s staff in a message titled “the survival of British Airways” that coronavirus was causing a crisis “of global proportions like no other we have known”, more serious than the financial crisis, SARS or 9/11.
“Please do not underestimate the seriousness of this for our company,” read the message from Cruz, a transcript of which was seen by Reuters.
Airlines around the globe are cutting flights and costs amid plunging demand and U.S. travel restrictions on European passengers, with Europe’s second biggest airline Lufthansa (LHAG.DE) reported to have asked for state aid and low-cost carrier Norwegian (NWC.OL) pleading for help.
The industry is braced for further failures as no carrier is exempt from the short-term pain that has already seen British regional player Flybe collapse and Norwegian’s stock lose about 80% of its value in a month.
Cruz said that BA, which along with Iberia and Aer Lingus is part of the financially strong IAG (ICAG.L), was more resilient “than ever before” with a strong balance sheet.
But the airline was under “immense pressure” and would “have to react fast and definitively in response to the worsening situation” he said in the message.
As a result, jobs would be lost “perhaps for a short period, perhaps longer term” and the company was in discussions with trade unions, Cruz added. Aircraft would be grounded in a way that the airline has never had to do before, he said.
A spokeswoman for BA, which is based at Heathrow in London, declined to comment when asked how many jobs could go. The airline employs 45,000 people.
While Britain was exempt from U.S. travel restrictions announced on Thursday which will hit its continental European counterparts, it has already cancelled flights to the U.S. as well as Italy, China and South Korea.
New British government advice warning against all but essential travel to parts of Spain on Friday could further hurt BA, which has 17 flights to Madrid daily, plus dozens to other Spanish cities.
Shares in IAG traded up 8% to 355.8 pence in the hour after Cruz’s warning over jobs, paring gains of as much as 14% earlier in the session. IAG’s stock price has fallen by 42% in the last month.