British Airways Chief Executive Willie Walsh (L) and Tony Woodley of the Transport and General Workers Union speak at a news conference in London Monday, following the cancellation of proposed industrial action by BA staff. - Reuters
LONDON, United Kingdom (Reuters):
British Airways Plc. narrowly averted a costly 48-hour strike by cabin crew members yesterday, reaching a last-minute deal with its largest union in return for new working conditions a day ahead of the planned protest.
Europe's third-largest airline said it would try to reinstate as many as possible of the 1,300 flights it had cancelled for today and tomorrow, although it acknowledged that many of the 140,000 travellers affected had already switched plans.
A pair of three-day strikes set for February were also called off.
"We have resolved what was a major industrial issue in a very thorough way," British Airways chief executive officer Willie Walsh told reporters.
"Unfortunately, the decision has come too late to prevent disruption to the travel plans of tens of thousands of our customers," he said in a news release.
"We're delighted to reach an agreement," Transport & General Workers Union (T&G) General Secretary Tony Woodley told reporters.
The T&G, representing two-thirds of BA's 15,000 cabin crew, said it had won a 4.6 per cent pay rise for its members at BA, or 0.2 percentage points above Britain's RPI measure of inflation, which would begin next month.
A deal set at RPI for next year was also agreed.
BA also agreed to address disparities in its two pay scales for cabin crew. Stepped changes to the lower-paying of the two will raise a ceiling on base cabin crew pay to £18,600 in four years from a current cap of £15,748, BA and T&G officials said.
T&G's Woodley said the move would boost pensionable pay by 18.75 per cent in some cases, and involve BA contributing an initial £6 million.
Walsh, who took over at BA in October 2005 and introduced a tougher system for sick leave which saw the annual average taken by cabin crew drop from 22 days to 12, said he accepted that staff complaints about how the system has been adopted were genuine.
T&G appeared to win concessions on this issue, but neither side was willing to give details.
For the airline, a key aim was to win agreement to more efficient work practices, a step vital to making the most of its move into its new home at Heathrow Airport's £4.2-billion (US$8.22 billion) Terminal 5 next March.
With Monday's deal, BA won T&G backing for its proposed plan to lower its £2.1 billion pension deficit in return for such changes to work practices, including lowering the number of air pursers on long-haul 747 jumbo jet flights to three from four.
BA shares rose on the news, closing up 2.75 per cent at 542 pence.
Earlier, UBS analyst Tim Marshall boosted his target price for BA to 650 pence from 600 pence while maintaining a 'buy' rating, noting in a research note that strikes have offered buying opportunities in BA stock in the past.
