Aviation Sector

Greg Clark Excerpts

Thursday 10th September 2020 Commons Chamber

[Huw Merriman]

I will make a little more progress as I have only a few minutes left, and I might then take one or two more interventions. I wish, certainly from the Government Benches, to touch on the opportunity for more competition in the market. If airlines are not going to expand, and if they are to cut their workforce drastically, I would like the way that we allocate slots at our airports to be changed dramatically. If companies such as British Airways do not have the staff to continue to utilise the slots—hon. Members should bear in mind that from a legacy perspective BA has 51% of Heathrow slots—I would like those slots to be auctioned to new entrants to the market, so that we can make more money and see a bit more responsibility. Those are good free-market principles, and once we leave the European Union, we can start to make such changes. I know we are somewhat bound by IATA rules, but so is the US and it still makes its own rules. I urge the Government to look at the competition argument for slot reallocation.

Jobs and redundancies are a huge worry, and 30,000 jobs in the aviation sector have already been directly put at risk. Virgin and Ryanair have each suffered 3,500 job losses, and easyJet has lost 4,500. The Transport Committee report made clear that redundancies were inevitable with such a drop in passenger numbers, but I am afraid I must make a special mention of British Airways, our national flag carrier. Of its 42,000 staff, 12,000 jobs have been put at risk. Across the board, those members of staff were given the option of taking voluntary redundancy, and if they did not sign a settlement agreement they would lose their staff travel allowance, or they had effectively to reapply for their old jobs on terms that had not been set out. That was a big Russian roulette gamble for them and a big risk. If they did not agree to voluntary redundancy they could be looking at reductions in terms and conditions at more than 50%. For them not to even know those conditions when being given such a choice is, in my view, absolutely shoddy treatment, especially at a time when British Airways’ parent company, International Airlines Group, is looking to spend €1 billion on a new airliner, and 66% of its profits was put in by British Airways staff.

The reason there is so much suspicion about the behaviour of British Airways is because this restructuring has been tried before. This was dusted off, and there is a perception and a feeling, and I think the evidence, that the pandemic has provided the perfect backdrop for BA to start paying its staff on low-cost terms. If that is the case, why do I have pay premium for that to occur?

[Greg Clark (Tunbridge Wells) (Con)]

My hon. Friend is making a powerful speech. Does he agree that premium brands are built on people, and it is incumbent on companies that aspire to be a premium brand to treat their people in a way consistent with that?

[Huw Merriman]

My right hon. Friend is right. Across the House we expect the best from our premium brands if they are to be our flag carriers. If a company is saying to its staff, “You might be required to allow us to put you out of work for eight-weeks during the year without pay”—that is two months—“and at other times we might effectively put you on furlough without pay”, how on earth is a member of staff supposed to react?

What I would say before I take one more intervention—[Interruption.] I will not take another intervention, Madam Deputy Speaker. I see an opportunity for British Airways here. It is fair to say that the new chief executive, Luis Gallego, is a thoughtful and reasonable man who is two days into his job. I do not believe he will have the same scorched earth approach to industrial relations as his predecessor. There is still time, because these terms have not yet come out, for British Airways to do the right thing. Perhaps it will do what Ryanair has done and said, “There is a 20% pay cut across the board, for everybody. That pay will be returned when better times come.” We know that our aviation sector has better times to come. I say to IAG’s chief executive: it is not too late, you still have time to do the right thing and protect your workforce and your brand. On that note, Madam Deputy Speaker, I give way completely and allow the debate to continue.