British Airways has begun talks with trade unions over job cuts, and has set a deadline of 30 June for an agreement to be reached.
BA is locked in talks with Unite union about cost cuts related to cabin crew and baggage handlers, and an industry source said the negotiations were progressing less smoothly than with the pilots, who have agreed to voluntary pay cuts.
Willie Walsh has said he is looking to cut up to 2,000 jobs, saying the redundancies would, if necessary, be compulsory as his airline attempts to cut its 14,000-strong team of cabin crew to 12,000.
BA has put 32 money-saving proposals to its flight attendants, including cutting annual leave from 36 days to 34. It also wants a two-year pay freeze and a reduction in the allowances paid to crew who fly long-haul.
A dispute with flight attendants two years ago cost the airline £80m. Although they called off a threatened strike at the 11th hour, BA was left with empty terminals at Heathrow airport after passengers avoided the airline or sought compensation for their bookings.
Trade unions have called for short-term pay changes but are so far balking at permanent alterations to their contracts. However, Walsh was adamant that airlines face a prolonged downturn and added that any economic recovery would not be strong enough.
“There will not be an economic recovery that will be quick enough or strong enough to address the challenges. Our people understand that we have to take action.”
BA cabin crew get paid more than double Virgin Atlantic’s flight attendants at just under 30,000 pounds a year.
Meanwhile BA has released figures of Walsh’s salary, showing he received an above-inflation 6 percent pay rise last year.
The group’s annual report for 2008/09, published on yesterday, showed Walsh was paid £743,000 pounds for the year to end March, up from £701,000 the previous year.
Neither salary included a bonus. Walsh waived his extra pay-out for 2007/08 in recognition of the shambolic opening of Heathrow’s Terminal 5 building, which saw hundreds of flights cancelled and baggage lost.
Finance Director Keith Williams, who did take a bonus in 2007/08, saw his overall pay cut last year to 446,000 pounds from 556,000 the previous year.
Both men have agreed to a pay freeze this year and will go through July unpaid as the company attempts to cut costs.