Senior British Airways (BAIRY) managers last night warned they were in a "fight to the death" with unions over plans for an unprecedented 12-day strike by cabin crew which threatens to wreck the Christmas travel plans of over 1 million passengers.
Virgin Atlantic, easyJet (EJETF) and Ryanair (RYAAY) are set to make a fortune at the expense of BA after unions chose the nuclear option announcing a walkout from 22 December to 2 January following a 9-1 vote in favour of industrial action.
Last night the lowest economy return fare on the world's premier intercontinental air route, Heathrow to New York JFK, on the first day of the strike, rose to £3,300. Other flights had more than doubled in price.
No UK airline has ever faced such a long strike which will wipe 7,000 flights from the airline's schedules. But despite a loss of revenue of between £300m and £400m—and a great deal of goodwill—Willie Walsh, BA's chief executive, has the strong backing of the board in taking on the cabin-crew unions.
British Airways lost £401m in the last financial year, and is set to lose even more in the current year. Its losses are thought to be around £1,000 per minute. BA announced earlier in the day that its pension fund deficit had increased by 75 per cent in the past three years to £3.7bn.
The board believes that unless they can substantially reduce staff costs—which are far higher than its rivals—BA does not have a sustainable future. One source close to the company said it could not back down and would "fight to the death".
Some members of cabin crew were alarmed by the "nuclear option" that the unions had adopted. The ballot merely asked: "Are you in favour of industrial action?" and many were surprised it had chosen such extreme tactics.
"In the past we've only gone on strike for a couple of days," said one stewardess. "I'm going to have to spend Christmas fixing up my CV." With the exception of a relatively small number of services from London City, all flights will be cancelled. The new flagship service from the Docklands airport to New York will be hit.
For the past month, nearly 13,000 cabin crew have been balloted for industrial action. The majority—92.49 per cent, on a turnout of 80 per cent—was described as "unprecedented" by union officials.
"This is an incredibly high return by any standard," said Len McCluskey, assistant general secretary of Unite. "The decision has been taken to have the maximum impact." The strike was announced at a mass meeting at Sandown Park racecourse in Surrey organised by the two unions involved, Unite and the T&G.
British Airways said it was "extremely disappointed" with a strike it called "completely unjustified and a huge overreaction to the modest changes we have announced for cabin crew".
"It is very sad that they are seeking to use the Christmas holiday plans and family reunions of hundreds of thousands of people to try to pursue their case," said Mr. Walsh. "We will not be reversing our changes to onboard crew numbers."
The unions say that they have 18 separate issues in dispute with BA. But the main concerns are over new rosters unilaterally imposed by management on Heathrow cabin crew for the past four weeks—reducing by one the number of crew on each flight—and plans to recruit new staff on inferior terms and conditions.
The strength of feeling was summed up by a cabin services director at the meeting, who said: "BA's loyal cabin crew are very angry at the way this leadership is destroying a company we were so proud to work for with impositions [of new cabin-crew rosters] and bad management decisions." An anonymous cabin-crew contributor to an online forum posted the message "Trust BA management? I'd rather let Dr Shipman look after my folks for the weekend."
BA employs 14,000 cabin crew—more than 95 per cent of whom are union members. Most belong to Unite, with a small percentage in the T&G. Much of their fury is directed at Willie Walsh, who has been the target of a bitter personal campaign. Yesterday he described the Unite union as "bent on self-destruction…like King Canute, it sits by the water's edge shouting at the waves of recession and competition to go back."
Frances Tuke, a spokeswoman for the travel organisation Abta, said: "The strike announcement is bad news for the travel industry. People who have booked Christmas and New Year package holidays involving British Airways flights will find that tour operators will either have to rearrange flights for them or give them a refund."
Bob Atkinson, from Travelsupermarket.com, said: "This is a double disaster for BA. Its customers are now going to be significantly affected and the airline will take a financial hit from the action."
Jim McAuslan, leader of the British Airline Pilots' Association, said: "There can still be a resolution of this conflict even at this, the 11th hour. The last thing we want to see is the travelling public inconvenienced and BA's long-term future damaged."
Paul Simmons, easyJet's UK general manager, said his airline still had seats available over the Christmas and New Year period.
One passenger, whose flight from Heathrow to Glasgow on 27 December is now likely to be cancelled, said: "This will be my last ever flight with BA. When other carriers are adopting a much less selfish approach to their job prospects and the needs of their customers at this special time of the year, I refuse to ever again subsidise over-inflated salaries for BA cabin crew."