IAG shares slide as BA boss admits: “we are fighting for survival”

IAG shares slide as BA boss admits: “we are fighting for survival”

Shares at International Consolidated Airlines Group (LON: IAG) have slid almost 4% after British Airways (BA) chief executive Alex Cruz told MPs: “We’re still fighting for our own survival”.

Concerns over the struggling airline came to ahead as Cruz spoke to the Transport Select Committee on Wednesday, confirming a slump in travel caused by the renewal of some lockdown measures as well as the end of the summer holiday period.

Pilot unions and MPs had previously accused BA of adopting a “fire and rehire” policy – alleging some staff were facing pay cuts of up to 50% – however Mr Cruz was adamant that this is now “off the table”.

He added: “There will be no need to issue new contracts”.

BA reached an agreement with trade union Unite last week, after a warning that 10,000 of the 42,000 company staff registered at the start of the coronavirus pandemic might lose their jobs.

Transport Select Committee Huw Merriman previously described BA’s “fire and rehire” policy as a “national disgrace”, and Labour MP Ruth Cadbury pointed out that sister airline Ryanair (LON: RYA) had “treated its staff somewhat better”.

Speaking to the Committee, Mr Cruz outlined the steep path ahead to BA’s economic recovery:

“Last week we flew 187,000 passengers. The same week in the previous year we flew almost a million.

“We remain worried about the virus in the winter season. People are still afraid of travelling. We are having weekly changes to the quarantine list.

“All the data that we get are still pointing at a slow recovery process”.

Mr Cruz has already taken a 33% pay cut, but the airline is reportedly still burning through £20 million in cash per day. It has temporarily suspended all of its Airbus A380 jets due to a lack of flights, and has submitted plans to scrap its entire Boeing 747 “Jumbo jet” fleet.

He has been critical of the UK government’s decision not to implement coronavirus testing at airports, and called for MPs to “enhance” the current scheme to “make it more consistent and deliver less change”.

“We need more regional considerations in order to fly to places where the rates of infection are lower than in the UK. If we could start [testing] tomorrow, it would help the British economy”.

The IAG share price slid 3.77% to 128.38p as of BST 12:51 16/09/20, following a steep decline from its peak of 279.30p back in June when quarantine measures were first lifted.