BA running out of patience with crew dispute

BA running out of patience with crew dispute
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First Published: Tue, Jul 13 2010. 05 23 PM IST
Updated: Tue, Jul 13 2010. 05 23 PM IST
London: British Airways is running out of patience with an industrial dispute over pay and conditions by cabin crew, the company’s chairman told shareholders at its annual general meeting on Tuesday.
“The Board’s patience with BASSA has now been exhausted. We will win the right to manage,” said Martin Broughton, referring to recent strikes over pay and working conditions by members of BASSA, the cabin crew branch of trade union Unite.
The Unite union, which represents 90% of BA’s 12,000 cabin crew, handed out letters to shareholders on their way to the AGM on Tuesday, asking them to use their influence to stop the long-running dispute. Broughton also said Spanish airline Iberia has until late September to consider BA’s £3.7 billion ($5.54 billion) pension deficit recovery plan, as part of the planned €8 billion deal to create the world’s third biggest airline.
“I am very optimistic that Iberia will approve the pension plan,” he said, adding that if shareholders approve the plan in November the merger could be completed by the end of the year.
As part of the deal, BA agreed to reduce its £3.7 billion pension deficit, potentially removing an obstacle to the merger.
Broughton said the current trading environment is still harsh but is showing improvement from last year’s depressed levels.
The company is aiming for a 6% revenue growth and to break even at the pretax level this year.
In May, BA said it aimed to break even next year, after posting a record £531 million full-year loss, due to industrial disputes, recession and winter snow.
The loss was BA’s largest annual deficit since it was privatized in 1987 and follows a £401 million loss last year.
The current industrial dispute started when BA decided last November to cut cabin crew pay and reduce staffing levels on flights to save £62.5 million ($93.6 million) a year.
Cabin crew have until 20 July to vote on BA’s latest offer. They have held a series of strikes this year, costing the airline £150 million.
BA’s latest offer includes two years of guaranteed rises in basic salary from February 2011, in addition to annual incremental pay increases.
However, a sticking point in negotiations between the airline and Unite has been BA’s removal of travel perks from striking workers.
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First Published: Tue, Jul 13 2010. 05 23 PM IST