IAG’s Walsh says Britain is throttling a travel recovery

LONDON (Reuters) – Britain’s quarantine plans and a minister’s comment that big foreign holidays were unlikely this year are seriously hindering any travel recovery, said Willie Walsh the boss of British Airways parent company IAG (ICAG.L).

Airlines have been brought to their knees by the coronavirus pandemic and are making tens of thousands of job cuts to try to survive.

They had been hoping for a recovery to begin in July, but Walsh, one of the most experienced airline bosses in the world, said the British government was seriously damaging the chances of a recovery.

“The prime minister’s decision to quarantine people arriving in the UK, by air, and the Health Secretary’s comments that it was unlikely that ‘big, lavish international holidays’ were going to be possible this summer, have seriously set back recovery plans for our industry,” Walsh said in a letter to parliament’s transport committee on Thursday.

In the letter, which came after he was questioned by British lawmakers on Monday, Walsh also said that planned consultations with unions over 12,000 job cuts at British Airways would go ahead.

“We must act now to secure the maximum number of jobs possible, consistent with the reality of a structurally changed airline industry in a severely weakened global economy,” he said.

Walsh said the UK finance minister’s extension of a coronavirus job retention scheme on Tuesday was helpful to the company, but not enough to save jobs given the deep challenges faced by the aviation industry.

The quarantine rules, which Prime Minister Boris Johnson said consist of a 14-day isolaton period for most arrivals from abroad, will hit travel demand airlines have said.

With planes grounded since late March, IAG had said flights would restart in July. Another big European airline group Ryanair (RYA.I) plus holiday company TUI Group (TUIT.L) are also eyeing a July resumption.

The industry is waiting for more details on the quarantine, such as when it will start and how long it will last.

BALPA, the UK’s pilots union, said the quarantine was too blunt a tool that would cause further damage to the travel industry and the economy.

“We have seen no evidence that such a blanket policy is needed and would strongly urge the government to move to a targeted and tailored approach according to destination and risk,” BALPA’s general secretary Brian Strutton said.

The letter from Walsh also provided the transport committee with details on refunds, after lawmakers questioned BA’s policy.

British Airways has provided cash refunds on 921,000 tickets, he said, adding that there were 47,400 bookings outstanding which were being processed. Vouchers were accepted by customers on 346,000 bookings, Walsh said.