Published: Thursday, 10th July, 2008 15:00
No plans to lay off staff says BA chief
By Lucy Crossley
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Challenging times ahead: British Airways chief executive Willie Walsh
AIRLINE staff have been assured that their jobs are safe, despite rising fuel prices causing havoc in the industry.
British Airways (BA) chief executive Willie Walsh has revealed there are no plans to lay off staff, many of whom live in the Bracknell area, saying they all play a key role at the airline.
Speaking at a media briefing on Friday, Mr Walsh said: “We have reduced the number of people who work at BA in the past because of technology.
“For example, technology has made distribution models simpler, but we are in the service industry and we need people to provide that service to our customers.
“I don’t think there is scope to significantly reduce the numbers of staff and I don’t see where the next technology advances like that will come from.” With the price of oil rising from $110 per barrel at the start of June to $146 per barrel last week the airline industry faces difficult times, with many smaller carriers including business only airlines Eos and Maxjet going out of business.
But Mr Walsh, speaking to reporters from local newspapers ringing Heathrow, said that the UK’s flag-carrying airline had been
protected against the credit crunch so far because of last year’s record profits of £875m. The company bought 75% of the fuel required for this year when the price was $91 a barrel, meaning that only 25% needs to be bought at the current price.
Mr Walsh said: “Ryanair hasn’t done that and they are having to pay the current price for their fuel. I think Ryanair and Easyjet will be around for a long time but they will have to raise their prices – even if they don’t charge passengers for fuel they will charge them somewhere. There are very few airlines which can cope with the massive increases we have seen. It costs us $8m a day and it’s definitely going to be a challenge.”
Next summer things will be even tougher for the industry as Mr Walsh believes that oil prices will continue to rise and customers will begin to be put off by the inevitable ticket price hikes.
This summer’s holidaymakers booked their flights back in January when money was not so tight. Mr Walsh said: “A lot of people this year paid for their holidays when the oil price was lower, as were energy and food bills.
“We’re probably not seeing the full impact of this yet and won’t until next year.”
Mr Walsh said BA will have to increase its prices but is trying to cut costs by bringing in more energy efficient practices across the company and is looking at reducing the frequency of flights on some routes to cope with weakening demand.
“We haven’t identified any routes that will be affected yet but we’ll keep that under review,” he said. “We won’t cut many routes because we haven’t been growing much in recent years and typically newer routes are the ones that aren’t profitable.”
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