British Airways has told its cabin crew that it wants to cut 2,000 jobs, leading to fears that the airline could be hit by a summer of strikes.
It is understood that BA’s management has already begun working on contingency plans to deal with possible industrial action during the busy holiday period. The airline told its 14,000 cabin crew last week that it was looking for the equivalent of 2,000 voluntary redundancies and if these cuts cannot be achieved, the losses could become compulsory.
More than 2,500 jobs have already gone at BA in the past year as it seeks to cut costs amid a severe downturn in the airline industry. BA’s pilots have agreed to 100 voluntary redundancies and will vote next week on a series of cuts to pay and conditions.
However, other big segments of BA’s workforce including the cabin crew, are expected to reject the airline’s proposed cost reductions. Ground staff overwhelmingly rejected revised pay and conditions last week. The management will begin intensive talks with unions today after the airline set a deadline of June 30 to agree new terms.
BA has put 32 money-saving proposals to its cabin crew, including cutting annual leave from 36 days to 34. It also wants a two-year pay freeze and a big reduction in the allowances paid to crew who fly longhaul.
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There is also speculation that BA may seek to close its final salary pension scheme as its deficit grows. The deficit is thought to have nearly doubled to £3 billion, which is more than the market capitalisation of the airline.
Unions representing BA’s workforce have indicated that they are willing to accept short-term changes to pay and conditions but will not accept permanent changes, raising the prospect of industrial action after June 30.
A BA employee who contacted The Times said: “BA looks as though it is heading for strikes this summer. They want to use the recession as an excuse to decimate the terms and conditions of thousands of BA’s long-term, loyal employees.” BA is suffering from a collapse in passenger numbers as a result of the economic downturn and lost £401 million last year.
The International Air Transport Association (Iata), which represents 230 airlines worldwide, said yesterday that it expected 2009 to be another horrific year for the industry. It increased its estimate of industry losses to $9 billion (£5.6 billion) this year up from a previous forecast of $4.7 billion.
Giovanni Bisignani, director general of Iata, said that there had been growing signs of a bottoming-out of the recession, but any recovery in air traffic faced several “severe headwinds”, including high consumer debt and business stocks. BA is so concerned about its prospects for this year that it has refused to give any guidance on its expected financial performance.
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A spokesman for the airline said: “It is important that we make progress in our talks with staff. The airline industry is facing very serious crisis in what is undoubtedly the most difficult trading environment it has ever been in. We need to make our airline as competitive as we can and this means reducing our controllable costs.”
A spokesman for Unite said it was in negotiations with BA, but would not comment until later this week. Shares in British Airways closed down 5.6p or 3.67 per cent at 146.8p