British Airways Union Said to Take Neutral Stance Over Pay Vote

British Airways Plc’s cabin-crew union will depart from its previous stance by putting the company’s latest pay offer to members without recommending they reject it, a person with knowledge of the matter said.

The 12,000 flight attendants will be asked to vote on the package in a ballot conducted by Electoral Reform Services Ltd. as early as the weekend, according to the person, who declined to be identified because the plan hasn’t been made public.

Unite’s new position may indicate that it regards the chances of securing further compromise from the British Airways as diminishing. The carrier issued fresh proposals on June 25, without restoring the travel perks Unite had said were key to a deal. A previous offer was spurned by 81 percent of respondents.

“It’s definitively a move in the right direction,” said Gert Zonneveld, an analyst at Panmure Gordon in London with a “hold” recommendation on British Airways stock. “At the end of the day the dispute has to be settled. It has cost the airline a lot of money and needs to be resolved, full stop.”

Europe’s third-biggest airline is seeking to prevent the resumption of strike action in a 17-month dispute over staffing levels and future wages. Chief Executive Officer Willie Walsh’s latest offer would boost allowances for existing cabin crew once new recruits join their ranks this autumn, drop plans to reduce benefits in order to fund higher staffing levels on some flights, and lift salaries for two years starting in 2011.

Unite won’t directly back the new proposals because British Airways hasn’t compromised on the punitive measures and the labor group will still look at resuming the strike should crews reject it, the person said.

‘Suicidal’

Unite scrapped plans for a strike ballot scheduled to start on June 29 after British Airways issued the new proposals, with Tony Woodley, the union’s joint general secretary, saying it would be “suicidal” not to put the offer to members.

Howard Wheeldon, senior strategist at BGC Partners LP, said he’s not convinced that cabin crew will accept the new terms, with the British Airlines Stewards & Stewardesses Association section of Unite likely to back further strike action.

“You can’t blame Unite for going down the road it has, because it has dug itself in a hole,” London-based Wheeldon said by telephone. “But I would be surprised if the result of the ballot is anything different than the previous one.”

Walkouts have forced British Airways to ground flights on 22 days since March 20. The carrier has said it will operate all long-haul flights from its London Heathrow base in a new strike, with services from Gatwick and London City airports unaffected.

“We have changed our offer in line with feedback we have received from crew,” British Airways spokeswoman Amanda Allan said in e-mailed comments. “Our offer is fair and reasonable and provides a genuine opportunity to end this dispute.”

British Airways traded down 2.6 percent at 190.9 pence as of 10:24 a.m. in London. The stock has added 2.1 percent this year for a market value of 2.26 billion pounds ($3.38 billion).

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

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