BA cabin crew to strike; pension deficit £3.7bn
14.12.09
British Airways cabin crew called a strike today, hours after the airline revealed a £3.7 billion hole in its pension fund. A Unite union spokesman told reporters: ‘The strike will take place over 12 days from December 22 but we have taken the decision, which will disrupt the travel plans of thousands of people, with a heavy heart. Of the staff balloted 92.5 percent voted in favour of industrial action.’
The union balloted some 13,000 cabin crew members on industrial action as part of a dispute over job losses and changes to working practices. BA wants three quarters of its crew to accept a pay rise of between 2 and 7 percent this year, which will be frozen next year, to accept applications from 3,000 staff to switch to part-time working and from over 1,000 staff for voluntary redundancy, along with a reduction in onboard crewing levels from 15 to 14 on long-haul flights from Heathrow.
The strike could cost BA around £50 million in lost revenues and refunds, analysts say. BA's chief executive Willie Walsh said: ‘A strike is senseless and we urge Unite to draw back. We will not be reversing our changes to onboard crew numbers. Unite must understand that there can be no return to the old, inefficient ways if we want to ensure long-term survival.'
Mr Walsh said changes at the airline, which analysts believe is losing £1.5 million a day, are essential to help repair its precarious finances. He said: Unite's decision will damage BA in the short-term and could damage the future viability of the airline.'
Earlier today BA said its pension deficit more than doubled to £3.7 billion at the end of March, from £1.8 billion a year earlier. This is at the high end of analyst expectations, but not seen as big enough to derail a merger with Spain's Iberia.
BA said the airline and pension trustees will work together to develop a recovery plan, a process which will involve the company consulting with employees and their trade unions and which must be completed by June 30, 2010.
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