Pilot Dispute Could Ground BA
British Airways agreed to emergency talks with pilots yesterday in a last-ditch effort to avoid a strike that would ground the airline for the first time in nearly three decades.
The conciliatory move from BA's chief executive Willie Walsh came after months of fruitless talks ended last month over the structure of the new subsidiary airline BA plans to launch that will fly between continental Europe and America. Pilots object to the service, called OpenSkies, because BA wants to hire pilots from outside the company, on presumably much less attractive terms than those employed in the mainline organisation. Balpa, the pilots' union, fears that BA will then use it as a "trojan horse" to force through pay cuts on the rest of the workforce.
Mr Walsh agreed to the conciliation talks yesterday after Balpa members voted 86 per cent in favour of strike action that could take place within weeks. It would be the first industrial action from the airline's pilots since 1980 and would "ground BA worldwide", according to the Balpa general secretary Jim McAuslan. Seeking to calm the increasingly bellicose stance of the pilots, Mr Walsh agreed to rekindle talks yesterday.
He said: "We welcome the progress made and are confident that a settlement can be achieved through conciliation which will protect our customers from the possibility of disruption." He added: "We are proud of the professionalism and high reputation of our pilots and have never sought conflict with them."
If the talks -- to be mediated by a third party -- fail, the union will move ahead as quickly as possible with the strike. It could be a series of one- to three-day strikes or an ongoing action, a Balpa spokesman said. But analysts predicted that BA would be forced to climb down as industrial action would inflict inordinate damage on the airline considering that the issue was OpenSkies, which Douglas McNeill, an analyst with Blue Oar Securities, deemed a "strategic side-show".
Mr McNeill said: "The pilots have all the cards, and if they play their hand right, BA will back down. It's a marginal project but a strike would be anything but marginal." OpenSkies will begin with two planes flying from either France or Belgium to New York this summer.
The union is concerned that BA will follow the lead of other legacy carriers and use OpenSkies as a back door to ram through significant changes to the employment terms of its 3,000-plus members. American Airlines, for example, started a short-haul subsidiary called American Eagle that began with six planes but grew to a fleet of more than 300 aeroplanes. The much less attractive terms its pilots were offered played a crucial role in American's ability to drive through massive pay cuts across the airline.
"BA pilots are determined not to let the same thing happen to them," said Mr McAuslan. "That is why Balpa has drawn a line in the sand. The ballot result shows the strength of feeling of our members about the implications of the creation of OpenSkies."
In America's fraught airlines sector, the legacy carriers have been hamstrung by powerful unions which have fought to preserve generous pensions and pay packages. In most cases, the airlines have only been able to push employment changes through the bankruptcy courts, or with the threat of bankruptcy looming, as in American Airlines case.
The union may refrain from striking during the peak Easter travel period to avoid alienating passengers. Mr McAuslan added: "We have no quarrel with the travelling public and have always maintained that these issues could be resolved through negotiation rather than confrontation."
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- The Two Words That Will Help Get an Airline Upgrade Over the Phone
- Stocks Turn Lower, Dollar Rises After Fed Minutes: Markets Wrap
- Risky Crypto Bet Dents Dennis Gartman's Retirement Account
- Brighter U.S. Growth Outlook Emboldens Fed on Rate-Hike Course
- Apple in Talks to Buy Cobalt Directly From Miners