The ongoing conflict between British Airways and its cabin crew looks set to be reignited after chief executive Willie Walsh said that pay increases this year would be restricted to less than one percent.
The pay deal for cabin crew ends this month, and Mr Walsh said that the new deal for 2009 would be based on the UK’s retail price index in December, which was 0.9 percent.Speaking on the inaugural BA flight to Hyderabad India, he said: “Typically our pay deals are RPI-linked,” adding that the new “will therefore be based on the RPI at the end of December”.
Unite, the union which represents the majority of the 14,000 cabin crew, is pushing for a deal around the two percent mark.
A spokesperson for the union said: “This claim covers all pay groups, from engineers to cabin crew. Until we have met with BA’s management to discuss this further, that wage claim stands.”
RPI was 3 per cent in November but fell sharply as the price of fuel and household goods came down in the wake of the banking crisis.
But the consumer prices index, which includes mortgage and council tax payments, was 3.1 per cent in December, which Unite argues is a more accurate measure of inflation.
The deal agreed two years ago was for a pay increase of 4.6 per cent in return for an agreement to introduce new working practices.
But now, with the UK technically in a recession, BA is looking to cut costs across the company because demand for air travel has slumped, most notably its cash-cow premium class, which showed a 13 percent fall in figures last month.
Internally, the airline has told staff to expect a restructure that will be “far- reaching, reshaping our company from top to bottom”.
Writing in the current issue of the staff newspaper, Chief Financial Officer Keith Williams said: “Only through delivering fundamental change can we achieve the small profit we are targeting this year and emerge from the crisis as a strong global player.”
BA has already lost 480 managers after offering voluntary redundancies to 1,400 people. But a BA spokesperson said the airline was looking at further ways to reduce costs and duplication to raise efficiency.
According to The Times, cabin crew may well be more flexible in their pay demands this year to current woes of the industry and fears over the jobs.
However, it is not clear whether crew will back their union if strike action is proposed. Members of crew who spoke to The Times said that the crisis in the aviation sector may force them to be more flexible in their pay demands this year.
A possible compromise may be for staff to accept a small increase in return for a commitment that there will be no compulsory redundancies.