British Airways asks staff to work unpaid for up to a month

Just how bad is the economic recession? At least, for some industries, the impact is really that disastrous…

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June 16, 2009 -- Updated 2053 GMT (0453 HKT)

Story Highlights

• Union spokesman: Workers could not afford to work for free for a month
  
• British Airways employs just more than 40,000 people in the United Kingdom
  
• Airline's CEO: There are "absolutely no signs of recovery" in the industry
  
• Last month, the company posted a record annual loss $656 million
  

British Airways plans to reduce capacity by 4 percent next winter by parking up to 16 aircraft.

LONDON, England (CNN) -- British Airways is asking thousands of its staff to work for free for up to four weeks, spokeswoman Kirsten Millard said Tuesday.

In an e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave -- but with the option to work during this period. British Airways employs just more than 40,000 people in the United Kingdom.

Last month, the company posted a record annual loss of £400 million ($656 million).

Its chief executive declared at the time there were "absolutely no signs of recovery" in the industry.

"I'm 30 years in this business and I've never seen anything like this. This is by far the biggest crisis the industry has ever faced," said Willie Walsh, British Airways' chief executive.

A spokesman for one of Britain's biggest unions said its workers could not afford to work for free for a month.

"It's all well and good for Willie Walsh to say he's prepared to work for free when he earns four times in a month what they do in a year," said Ciaran Naidoo, a spokesman for Unite.

He pointed out that the airline was not ordering staff to work without pay.

"It's a request -- you can take unpaid leave or you can work for free, and the chances of people working for free are very unlikely, but there might be some people who want to take unpaid leave."

Demand for the airline's passenger seats and cargo holds fell during the last financial year, while its fuel bill rocketed to almost £3 billion ($4.7 billion).

Walsh said British Airways' woes were inextricably linked to the downturn in the global economy and that there had been no sign of any "green shoots" of recovery.

Like its premium-class competitors, British Airways is losing customers to cheaper rivals.

The airline's premium passenger numbers fell 13 percent in the second half of last year, in line with the industry average.

Total traffic fell 3.4 percent and while the airline carried 33.1 million passengers last year, it was a drop of 4.3 percent from the previous year.

The dip in demand for British Airways' flights has forced a switch in strategy at the airline.

From the end of last year, it has been trying to tempt passengers with lower fares, sacrificing profit per seat for "bums on seats."

It plans to reduce capacity by 4 percent next winter by parking up to 16 aircraft.

From CNN.com; see the source article here.

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