British Airways resolved a bitter dispute with its pilot's union, reaching a deal on cuts in pay and headcount that will help the airline get through the deep slowdown triggered by the coronavirus pandemic.
The plan dramatically reduces the number of mandatory job cuts to 270 from the original proposal to let go of 1,255 pilots, according to a statement late Wednesday from the British Airline Pilots’ Association.
The IAG SA unit will rely on voluntary moves to bridge much of the gap, while also creating a pool of 300 pilots who receive reduced pay and are earmarked to get back in the cockpit when demand returns.
British Airways pilots who remain in service will absorb an initial pay cut of 20%, which narrows to 8% over the next two years, the union said. The airline confirmed the deal in its own statement, without providing details.
The compromise quells a debate over how much pain the airline should pass on to its workforce after accepting government loan guarantees to survive the crisis. British Airways has faced criticism from U.K. lawmakers for its plan to cut as many as 12,000 jobs as it sought to preserve cash and cope with a slow recovery.
The House of Commons Transport Committee accused the airline of using the global outbreak as an excuse to slash the payroll. Prime Minister Boris Johnson last week refused to join in condemning British Airways, saying it was “in severe difficulties.”
As part of the pilot's agreement, British Airways agreed not to follow through on its threat to fire and rehire its pilots on new terms if it couldn’t reach a deal with the union.
Balloting will close July 30, and the union has recommended that its members vote for the deal, it said in the statement.