Summary
Another summer, another strike at British Airways? Staff revolt could push the carrier to the financial precipice, but bankruptcy is not yet on the cards.
Analysis
Perhaps it’s no surprise that the union attitude towards British Airways’ proposals for pay freezes and redundancies has been less than pleasing –because they simply fail to understand the problems the airline faces.
Having stood down a number of 747-400’s, held almost “hostage-like” to Chinese banks for its capital expenditure on Airbus A380’s and Boeing 787’s, British Airways is in a fight for survival on the inside as well as the outside. Traffic in key markets like Asia is still in free-fall, premium traffic is switching to cheaper alternatives and after nearly a year of cut throat and often dire competition across the Atlantic, only now is British Airways seeing stability in its North America bookings across all classes of travel, with no guarantee that it will be sustained.
Only 2% of staff took up the request to work unpaid – that just shows how much hostility there is between workers and management, it appears to be far worse than when Bob Ayling was at the helm!
Such labour issues always crop up during summer and British Airways has endured its fair share of crippling strikes. Willie Walsh may have won over his BALPA and other non unionised pilots, the militancy from the GMB and Unite will ultimately push the finances of the airline to the brink.
The airline’s key financial backers have demanded that the Airbus A380 deliveries be deferred until a sustained “12 month traffic recovery” is attained and that they will not sanction early deliveries of 787’s vacated by cancellations that Boeing has seen this year.
Terminal 5 is still wrought with technical glitches, the pound is weak against the dollar, down some 20% on this time last year, meaning fuel bills paid in dollars undoes the hedging the airline negotiates and the pensions black hole has widened to almost £2bn. The unions fail to realise that not agreeing to management plans will mean those who keep their jobs will end up paying more to plug the pension gap, work longer and for less pay.
What’s not understandable in that?
Industrial action to get management to change plans will hit the very people the GMB and Unite aim to protect – just as likely a strike may be right now, I’d hedge my bets for even bigger and deeper staff cuts that will eventually be forced through anyway.
One only has to look back just over 12 months ago when British Airways succeeded in implementing new contract conditions for pilots at is Paris-based subsidiary, OpenSkies to see that Walsh’s team is committed to enacting its proposals, come hell or high water.
British Airways’ decision to call in the conciliatory services in ACAS is prudent move.
Given the relative “lack of teeth” that ACAS actually has, if British Airways walks away from talks, staff will seethe at their union leaders for not getting a better deal – of course, the truth is that these union leaders don’t always represent the wishes of those they claim to be standing up for and will only have themselves to blame when mutiny hits home as British Airways runs out of money to pay for their whimsical demands.
