The UK government will not extend the furlough scheme in definitely - what will businesses do once that ends? The BA legal team are not stupid and would have investigated the ability to start this process during this period and I suspect they also got outside legal advise. Starting now means that they can act once they furlough scheme ends.
Working for BA, the reality that this was coming start with the realisation that aircraft would be retired earlier and that some where being placed in long term storage. Sending all A380s to France was unexpected but spoke volumes. Thinking about this, it meant that we would be overstaffed for a long time going forward and things would need to change. Add to this the uncertainty of when countries will reopen to passenger movements and customer confidence in booking flights. With the talk of possible second waves, that confidence will be slow to return.
Is BA being opportunistic?? Without a doubt they are but they are not alone, just have so far had the highest announced number of potential redundancy and is one of the more high profile companies in the UK to make such announcements. As I understand it, Heathrow Airport has already started the process but I haven't had confirmation of exactly what they are doing. Since BA made their announcement, we have seen Ryanair and Rolls Royce.
Do I wish, things were different - yes I do but the longer this pandemic continues without a vaccine or cure, the worse I fear things will get. All I can do at this stage is to accept that I'm in a difficult situation, hope for the best and start thinking ahead and looking at alternatives should the worse happen.
Unfortunately true. The UK's furlough scheme was three to four times over-subscribed based on Treasury estimates. Pressure is mounting for the Government to say what happens after the end of June. Will it be extended? Can it be made flexible, e.g. to allow staff to return to work part-time and have some wages topped up? Many companies are considering starting consultations in less than two weeks because they have to run for 45 days, which would get you to the end of June. As you say, whilst some hope their will be a 'V' shaped recovery once the pandemic eases the aviation sector won't be one of those. So IAG are having to look at what this means.
LGW is heavily leisure orientated, even if O&D for London and the South East. Will people have money to spend on holidays? Who wants to go abroad in the current climate? Over at LHR business travel will take a hit. Many firms are finding that they have to embrace technology, which means fewer reasons to fly. When you have the Chief Executive of Barclays questioning the logic of so many employees in one place, with reviews into how to embrace home working as well as to utilise spare space in bank branches to create mini offices, well times are a changing.
IAG could tinker or they could be radical. They obviously believe in the need for the latter and a major retrenchment. The so-called London Airways will likely seem more like Heathrow Airways, and Gatwick (if it stays) will be much smaller. They expect to be a much smaller operation but to also to be in a tough environment for several years.
As much as many including the UK regulatory authorities may not like it, If VS does fail, then BA & IAG would make the mot sense to swoop in and take over it's assets, routes and slots. Somehow circumstance has always benefited BA, and it could again. No other airline could as quickly bring VS's dormant staff, assets and suppliers back to life than BA. They could easily take over the 747's A35K and 789's with no major change to their existing fleet. Could easily send the A333's to Iberia and Lingus. easily absorb Virgin holidays into BA holidays and take over all UK slots. Now that sounds horrible to any competitor or traveler, but nothing makes more sense to bankers, governments, airports, and creditors than this. People worry about a monopoly at an airport, its nonsense, just look around the world. Canada, Singapore, Hong Kong, Dubai, Australia all with flag carriers and not much else as home base. If this doesn't get approved, and VS simply collapses, then yes BA will scale up over time to take advantage, but so many people lose with VS's assets just being liquidated for pennies on the open market not to mention all the job losses!
If - still a big if - VS were to collapse do not expect IAG to ride in and purchase the lot. Why would they with the scale of the cuts proposed at BA? Plus what assets do VS actually have? This is apparently why they are struggling to get a Government loan - losses in three of the last four years and actually very few assets (e.g. virtually the whole fleet is leased). So that leaves LHR slots, but others may still try get their hands on those. Heck, with a 49% stake what is to stop DL having ownership of some transferred in advance of any collapse? LH did that with BD slots before selling to BA so that LH Group airlines all had a better slot portfolio at LHR. (It was why IAG was able to argue that MAN and GLA didn't fall into the remedy slot camp because BD had already dropped the routes and the slots had been reallocated within LH Group).
LGW leisure operation? No way BA would want to take on the VS 744 fleet, whilst the A333s are RR powered (EI/IB use GE powered machines). Same with MAN - why try rescue the VS operation in the current climate. Sadly if VS collapses the carcus will be be picked over, just as with Monarch and Thomas Cook.