MPs and a trade union have called for British Airways to lose some of its lucrative Heathrow slots due to cutting jobs while receiving tens of million of pounds of taxpayers’ money.

The Conservative chairman of the Transport Select Committee, Huw Merriman, described the airline’s behaviour as “ethically outrageous”.

He told the Commons it is “effectively sacking its entire 42,000 workforce and replacing it with 30,000 jobs on inferior terms”.

He asked aviation minister Kelly Tolhurst if the Department for Transport will order the Civil Aviation Authority to consider reallocating Heathrow slots away from airlines such as BA and “handing them to companies that wish to expand and take on workers”.

Ms Tolhurst replied: “We want airport landing and take-off slots to be used as effectively as possible for UK consumers as the UK aviation market recovers from the impacts of this terrible disease.

“I want to ensure the slots allocation process encourages competition and provides connectivity, so this is something that I will be looking at.”

British Airways chief executive Alex Cruz wrote an internal letter to staff, seen by the PA news agency, in which he stated that “every slot lost will lead to jobs in BA being permanently lost”.

He insisted he wanted to “save as many jobs as possible” and expressed concern that unions GMB and Unite “refuse point-blank to join any discussions about mitigating proposed redundancies and the impact of this dreadful virus”.

Numerous other MPs, including Labour’s Sam Tarry and the SNP’s David Linden, also called for BA to have its prime-time flight slots rescinded.

Mr Linden said airline staff are “cheesed off” with the handling of the situation by the Government, which must provide “much stronger language”.

He added that Willie Walsh, chief executive of British Airways’ parent company IAG, has a “callous and cavalier attitude”.

Mr Tarry said: “I would ask the minister to seriously consider whether or not any mechanism can be brought forward by the Government… to look at the allocation of the slots.”

Removing the slots “might make them sit up and actually listen”, he added.

Len McCluskey, general secretary of trade union Unite, said in a statement: “BA is using this health crisis as cover to impose a long-term plan to slash jobs, pay and conditions. No other employer has threatened to effectively ‘fire and rehire’ its workforce.

“There should be a Government review of British Airways’ domination of UK landing slots amid the airline’s betrayal of its workers and the British public.”

BA announced in April that it plans to reduce its workforce by more than a quarter as it does not expect demand for air travel to return to 2019 levels before 2023.

It had already furloughed around 23,000 staff under the Government’s Job Retention Scheme, which pays 80% of wages up to £2,500 a month.

Ms Tolhurst said: “The scheme was not designed for taxpayers to fund the wages of employees, only for those companies to put the same staff on notice of redundancy during the furlough period.”

Slots – which give an airline the right to take off and land at a certain time – can be worth several million pounds at Heathrow.

BA holds the majority at the west London airport.

Mr Walsh wrote a letter to Boris Johnson last week saying the airline received around £35 million from the furlough scheme in April, which amounted to 17% of its average monthly wage bill.

The Government and the CAA have an arms-length relationship with Airport Co-ordination Ltd, which allocates slots at the UK’s busiest airports.