Turbulence ahead for BA over pay and rations

BA boss Willie Walsh needs to save £82m - and he's got cabin crew pay and conditions in his sights...

Last Updated: 31 Aug 2010

Like all airlines, BA is facing exceptionally difficult trading conditions at the moment, as its lucrative business class trade has dried up with the recession and holidaymakers stay at home, grounded by the weak pound. It has already predicted that it will make a loss this year of £150m as a result; some jobs have already gone, and more may follow.

So the focus now is on saving money, and BA’s cabin crew are being ‘volunteered’ by their bosses to be some of the first over the top in the £82m cost-cutting drive. They are facing a reduction in holiday allowance, a two-year pay freeze and smaller bonuses for those working long-haul routes.

Some of the changes proposed don’t sound exactly radical, to be honest – a change to pay rises and promotions based on merit rather than seniority is surely long overdue – but staff are likely to see it as the thin end of the wedge. Especially as BA is also proposing that all new employees taken on in future should be on a new contract, which would include few or none of the advantages enjoyed by existing staff.

Cabin crew and their union leaders at Unite have already unanimously rejected permanent changes to their terms and conditions, but are apparently willing to discuss ‘temporary’ measures in response to the downturn. Their position is essentially that they are the best in the business and deserve to be recognised as such – and in a world where the Ryanair model of customer service (i.e. there is none) increasingly holds sway, that’s a refreshingly upmarket attitude. They have also demonstrated their willingness to take action to protect their status on several occasions in the past. No shrinking violets, these.

But in the opposing corner is BA boss Willie Walsh, a legendarily tough aviation executive whose resemblance to a featherweight boxer gives a good clue as to his modus operandi. Walsh made his name at Aer Lingus where his first task on taking over the top job was to sack two-thirds of the firm’s employees. Not the sort of first morning at work most of us look forward to. The rumour mill suggests that Walsh has long felt that cabin crew get a cushy deal and wants to use the recession as a golden opportunity to restructure their employment contracts once and for all.

The situation has the potential to become a fascinating stand-off for students of what used to be called industrial relations. When the irresistible force meets the immovable object, which will give way first? It’s not an easy call, but our bet this time around is that the cabin crew will have to make the greater compromise. In the current economic climate, it is going to be pretty hard for them to raise much public sympathy for their cause...

In today's bulletin:
Soaring unemployment creates Election headache
Turbulence ahead for BA over pay and rations
Pound store looking up thanks to Cheryl Cole's bikini
Innocent not guilty after Coke deal
Chancellor for the day: the LSE's Howard Davies

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