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Pilots at British Airways are to take voluntary pay cuts as the airline battles to stem record losses. However the airline could still be poised for a summer of strike action as ground staff vote six to one against a pay cut. At a meeting with the UK pilots union, Balpa, scheduled for this week, BA pilots will ballot on a range of cost-cutting procedures, which will include pay cuts across the board for all pilots, according to insiders. The Times reports that Balpa plans to have the measures in place by the end of this month, in what will be an unprecedented move by BA pilots.
Willie Walsh, BA’s chief executive, has warned staff the company is in “a fight for survival” and is seeking widespread cuts. However he is facing stiff opposition from cabin crew that are demanding any cuts will only be temporary concession to ease the airline through the current downturn.
Following a meeting of ground staff, insiders at the Unite union said 2,987 workers voted “No” while only 487 backed the cost-cutting proposals proposed by BA chief executive Willie Walsh. Sources at Unite have said: “Even the ground staff are squaring up to Willie for a strike.”
However BA is expected to take a hard line as it attempts to battle record annual losses, which were revealed last month to be £401 million.
An internal letter from Walsh to his 40,000 employees, including 14,000 cabin crew, is asking for volunteers to take redundancy.
Walsh writes: “The next four weeks are vital for the future of our business. We are very clear that we are now in a fight for our very survival and time is running out. This is not opportunistic gloom to drive through a management agenda. This is not a temporary problem. This is our greatest-ever challenge.”
BA staff have also been warned that they could be fired if they take time off work to attend mass protests over the pay and job cuts.
Last week Walsh has sparked controversy by admitting BA could close its salary pension scheme to 100,000 existing members as part of a programme to stem record losses, and smooth the way for a merger with Iberia. Concerns over the pension liability on BA’s balance have been a major stumbling block in its all-share merger talks with Iberia. The Spanish airline has requested a adjustment mechanism to protect it from any increase in the deficit. The UK flag-carrier said that all options to confront its pension deficit would be reviewed, despite it risking a fraught confrontation with the workforce.
The airline has seen profits and passengers plummet this year. In its 2007-8 financial year it posted record profits – only to see business traffic on its key North American routes dry up as the recession bit.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
