Travel News
BA Pledges to Fly 60% of Passengers in Strike as PM Urges Deal
Tuesday, March 16, 2010

(Bloomberg) -- British Airways Plc pledged to fly more than 60 percent of passengers holding bookings during a three-day strike by cabin crew as Prime Minister Gordon Brown urged the sides to resolve a dispute he called “deplorable.”

Europe’s third-biggest airline will focus its resources on long-haul services in the walkout from March 20 and only about 30 percent of short-haul routes from London’s Heathrow airport are likely to operate, it said in a statement today.

A strike over staffing levels and pay for 12,000 BA cabin crew would be against the best interests of the company, its workers and the U.K. and should be called off, Brown said today. A bid to bring the airline and the Unite union back to talks was unsuccessful, according to Liz Chinchen, a spokeswoman for the Trades Union Congress, which has brokered previous negotiations.

“We’ve got to find a way in which the two sides can get together,” Brown said. “I hope that things that are in hand today will lead to the two sides talking and finding some resolution. They were pretty close to an agreement at the end of last week, then it didn’t work.”

Flight attendants will stage a three-day strike starting this weekend, followed by a four-day action from March 27, Unite Assistant General Secretary Len McCluskey said March 12. The walkout will be the first at British Airways since 1997.

A seven-day strike could cost as much as 105 million pounds ($158 million), according to Andrew Light, a London- based analyst at Citigroup Inc. That’s more than the 63 million-pound annual saving BA is seeking through a labor deal.

Free Rebooking

The airline aims to fly about 45,000 customers a day during the first walkout, it said in the statement. A deal has also been reached allowing passengers to rebook onto the flights of 40 rival carriers free of charge where seats are available.

Services out of Heathrow, Europe’s busiest airport, will be worst hit, with BA cancelling about 70 percent of the short- haul schedule and close to 40 percent of long-haul flights. Inter-continental routes from London Gatwick should operate as normal, as should more than half of European services there. Flights out of London City Airport will be unaffected.

“We will continue to try to prevent this strike taking place, but we have reached a point when we must now offer some clarity to our customers,” Chief Executive Officer Willie Walsh said in the statement. “Due to the numbers of cabin crew who have called in to offer their services over the weekend, the schedule will be slightly larger than originally anticipated.”

Leases, Volunteers

British Airways plans to lease at least 22 aircraft and crews from eight companies to help provide the Heathrow short- haul service, it said today. About 6,000 employees across the company have volunteered to take on other roles during the strike, including 1,000 who will work as stand-in cabin crew.

Flight attendants probably won’t support a protracted strike because BA’s plans don’t include job cuts and their wages are relatively high, Citigroup’s Light predicted. His estimate of the strike’s cost assumes 70 million pounds of lost revenue from cancelling 50 percent of flights, plus plane-leasing fees.

CEO Walsh said BA will provide guidance on which services will operate during the second strike period when it’s clear how many cabin crew are willing to work, and that “the door remains open to Unite, day or night.” Spokesman Philip Allport said earlier that the company welcomes the intervention of Brown.

“I hope that the strike will be called off,” the prime minister said in an interview transmitted by the British Broadcasting Corp. “It’s the wrong time, it’s unjustified, it’s deplorable.”

Following similar remarks from Transport Secretary Andrew Adonis yesterday, Unite spokesman Andrew Murray called on the minister to urge BA to stand by an offer withdrawn on March 12, saying such a move would bring “a possibility of peace.”

Not Valid

The union said when announcing the walkout that the plan, though inadequate in its view, would be sent to members and the strike called off were it to be approved. BA says the offer is no longer valid as costs from preparing for the industrial action mean the savings it would deliver aren’t sufficient.

“It is rather unfortunate that politicians of all parties always want to kick the unions and kick the employees when in actual fact it’s my members who’ve been kicked here,” Unite General Secretary Tony Woodley said today in a statement.

The walkout won’t delay the signing of a definitive merger agreement between British Airways and Spain’s Iberia Lineas Aereas de Espana SA, scheduled to take place this month, according to BA spokeswoman Laura Goodes. Iberia, whose board next meets March 25, also said the deal is still on track.

Unite said today in an e-mail that it’s not helpful to discuss “private contacts” relating to the dispute.

TUC Effort

Weekend telephone calls to the union and BA from TUC General Secretary Brendan Barber brought no immediate prospect of fresh discussions, spokeswoman Chinchen said, adding: “I don’t think it’s on the cards at the minute.”

British Airways, seeking to slash expenses after logging record losses amid slumping demand, has been unable to secure a pact on cost cuts in a year of talks. Relations with Unite worsened in November, when Walsh cut crew numbers on long-haul flights without union approval.

“We can’t deal with a trade union that wants to go back to the days of the 60s and 70s,” the CEO said in a Bloomberg Television interview March 12. “What has been damaging to British Airways has been the constant threat by the unions of industrial action. It has been hanging over us now for months.”

Virgin Boost

Virgin Atlantic Airways Ltd., the carrier founded by U.K. billionaire Richard Branson, said bookings have increased as a result of the strife at BA, with traffic up 3 percent in December, the month cabin crew at its rival voted for a Christmas walkout that was later blocked by a U.K. court.

“There has been a definite, sustained effect,” Virgin spokeswoman Anna Knowles today in a phone interview. “People have certainly decided not to take the risk.”

Unite won backing for a strike in a month-long poll of workers. The authorization would have ended today.

Last-ditch discussions broke down on March 10 after BA rejected union proposals for a 2.6 percent pay cut this year, as well as lower staffing levels and a reduction in allowances. The carrier says the package falls short of the saving claimed by Unite and that its own plan achieves the sum with no wage reduction for serving employees.

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