Heathrow turns screw on cost cuts with new furlough plan

Britain’s biggest airport is to furlough its entire senior management team apart from its chief executive and pave the way for more permanent job losses, underlining its pessimism about the aviation industry’s short-term recovery prospects.

Sky News has seen emails sent by Heathrow executives on Friday which detail plans for a new voluntary redundancy scheme and a requirement for staff to be placed on furlough for at least four weeks between the beginning of December and the end of March.

Sources said the furlough requirement would apply to every Heathrow employee other than John Holland-Kaye, the airport’s chief executive.

The latest developments come weeks after Heathrow relinquished its crown as Europe’s busiest airport to Paris’s Charles de Gaulle, with passenger numbers at the London hub down by 82% year-on-year in October.

Industry analysts say the outlook for this month is even bleaker because of the second English lockdown.

Heathrow is burning through £5m every day while it remains open, and is estimated to have lost £1.5bn since the start of the pandemic.

It has nevertheless been locked in fractious talks with trade unions about revised employment terms for many of the 5700 people who work at the airport – including reduced pension contributions and reduced salaries for several thousand people.

Workers at the airport have voted in favour of industrial action over four days next month which unions have warned will mean that Heathrow “will grind to a halt”.

Significant compulsory job cuts remain a possibility, with the voluntary severance scheme outlined on Friday offering a lump sum in return for redundancy, with expressions of interest required by next Thursday.

One insider signalled that further compulsory redundancies were likely if too few people accepted the voluntary severance option.

Heathrow’s rivals, including Gatwick and Manchester Airports Group, which owns Stansted, have already cut hundreds of jobs each amid a slump in demand.

The wider adoption of the Treasury’s furlough scheme underlines how Heathrow is scrambling to save money eight months after the COVID-19 crisis erupted.

Ministers’ decision not to agree to a comprehensive airport testing regime has infuriated the tourism and aviation sectors, which have blamed the government for contributing to a lack of confidence in international travel between the lockdowns.

Heathrow and other airport operators are also frustrated that there has been no alleviation of their financial pain in the form of business rates relief, unlike that afforded to supermarket chains, which by contrast have thrived during the pandemic.

In an email to Heathrow employees, Paula Stannett, its chief people officer, said: “With the extension of the furlough scheme until 31 March 2021, all non-operational colleagues (negotiated and non-negotiated grades) and operational colleagues in non-negotiated grades will be required to take a minimum of four weeks (20 days) of furlough between 1 December and 31 March (pro-rated for part time colleagues).

“This furlough could be taken in one continuous block or as flexi-furlough, for example as one or two days each week.

“Reduced workload in some teams will mean that some colleagues will also continue to be asked to take longer periods on furlough.

Ms Stannett said that there could be limited exemptions to the requirement, adding: “We do recognise that a number of business-critical roles may not be able to take a full four weeks of furlough. These exceptional cases must be approved by People Committee.”

Sources said that the airport was also halting subsidised transport for people working on the site, including on bus and coach services.

The airport also plans to suspend free travel within the zone around the airport from January, while discounts on some train services would also be scrapped, according to another memo sent to staff.

Heathrow declined to comment.

This article was originally published by Sky.com. Read the original article here.