British Airways, which has lost a combined $485 million over the past two quarters, announced a round of job cuts that, along with other cuts already made or planned, will bring its total job losses to 4,900 by March 2010. But despite these massive cuts, the airline’s outlook remains bleak. British Airways CEO Willie Walsh said this has been the “most difficult year in the history of the aviation industry,” and projected revenues will be around £1 billion (about $1.6 billion) below last year’s numbers.
While few Americans fly British Airways, the number of lost jobs is nevertheless staggering, and paints a grim picture for the global industry. It also reflects the striking human cost of the recession, not to mention the unique challenges faced by the travel industry. Many industry prognosticators predicted (or at least hoped) a recovery would begin right around now, but steadily increasing fuel prices have put pressure on an industry still struggling to drum up business. Sure, more people are flying, but this is largely due to massive capacity cuts and heavy discounting on fares. The former is working—supply is, finally, more or less in line with demand—but while cheap fares are getting people onboard, the airlines aren’t making enough money from those tickets.
The odd people out, then, are the employees. It’s simple math: Fewer planes plus fewer dollars equals fewer employees. This goes to show that while airlines aren’t necessarily a consumer’s best friend, their success should, on some level, matter to all of us.