British Airways strike cost £45m

Strike action at British Airways cost the airline £40-£45 million in March, as cabin crew walked out for a total of seven days.

A three day strike from March 20th, followed by four days of industrial action from March 27th, cost the British flag-carrier approximately £6.5 million per day, the airline confirmed in a statement.

Both traffic and capacity were affected by the strike, with the airline operating 78 per cent of its long-haul and 50 per cent of short-haul programme during the first period of the strike.

For the second strike weekend, the figures rose to 83 per cent and 67 per cent respectively. 

As many as 12,000 cabin crew were called out on strike by the Unite union in a dispute over pay, working conditions and benefits. However, the union’s joint general secretary, Tony Woodley, has confirmed the two sides have resumed negotiations.

No further strike dates would be discussed while negotiations were ongoing, Mr Woodley confirmed.

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Despite the impact of the strike, British Airways confirmed earnings expectations for the year ending March 31st continue “broadly unchanged”.

Monthly Figures

Over the course of March, passenger capacity at British Airways (measured in available seat kilometres) was down 13.7 per cent. This resulted in a passenger load factor increase of two points versus last year, to 74.7 per cent. 

Traffic comprised a 7.2 per cent decrease in premium traffic and a 12.2 per cent decrease in non-premium traffic. 

Planned winter capacity reductions accounted for half of the decline in capacity for the month, with the other half due to the strikes.

Cargo (measured in cargo tonne kilometres) rose by 6.4 per cent; volumes were helped by the additional capacity available during the strike periods.

Strategic Developments

However, there has been some good news for British Airways in dealings with unions, with the airline concluding consultations with BALPA, GMB and Unite on the future of benefits for its defined benefit pension schemes.

The new benefit structure - which the trade unions will be recommending to their members - will be proposed to the pension trustees and form part of the negotiations towards a recovery plan that is expected to be presented to the Pensions Regulator by June 30th, 2010.