British Airways staff agree to work for free

In dire situation…

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Posted: 26 June 2009 0135 hrs

British Airways

LONDON: Struggling British Airways on Thursday said 800 staff had agreed to unpaid work and thousands more to pay cuts, helping the group save up to 10 million pounds (11.7 million euros, 16.3 million dollars).

After diving into a financial loss, the airline last month asked staff to work for free, while promising that chief executive Willie Walsh and BA's finance director Keith Williams would forgo their July salaries.

"This is a fantastic first response" to BA's cost-cutting programme, Walsh said in a statement on Thursday.

"I want to thank everyone who has volunteered to help us pull through this difficult period. This response clearly shows the significant difference individuals can make."

The world's leading commercial airlines are facing a major cash squeeze as the global economic slump crushes demand for plane tickets.

BA last month reported an annual loss of 375 million pounds, also blamed on high fuel costs. The airline has cut 2,500 jobs worldwide over the past year.

On Thursday, a BA spokesman told AFP: "800 (have) opted to work for free" for up to a month.

The airline added in a statement: "Nearly 7,000 British Airways staff have taken an early opportunity to apply for voluntary pay cuts in support of the airline's cost reduction programme.

"Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work... Their actions will save the company up to 10 million pounds."

BA's announcement came shortly before the end of stock market trading. The airline's share price closed up 1.04 percent at 126.60 pence on London's FTSE 100 index, which ended Thursday down 0.64 percent at 4,252.57 points.

Staff who have offered to work unpaid will still receive shift allowances and other payments, although they will forego their basic pay.

However Mick Rix, representing the GMB union, hit out at BA for releasing data on pay cuts while negotiations were ongoing.

"I find it disgusting that the company can make the announcement today," said Rix.

"We are locked into hard negotiations on making significant financial savings but BA seems only interested in making headlines rather than reaching an acceptable deal."

Last week, union leaders urged British Airways pilots to accept shares in the company in return for a pay cut.

Under the deal agreed with British Airways, pilots will see their annual pay cut by 2.61 percent and most jobs safeguarded.

The pilots' pay cut would generate 16 million pounds of annual savings, while pilots would also have to increase their working hours to help save another 10 million pounds annually.

In return, pilots would in two years' time be eligible to receive a proportion of BA shares worth a total of 13 million pounds if company targets are met. The pilots will not however be able to sell the shares until June, 2014.

- AFP

From ChannelNewsAsia.com; see the source article here.

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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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