British Airways, currently unchecked by the British Government, is having its cake and eating it too.
The airline benefited from the UK job retention scheme, enjoyed nine figure loans from the government bailout fund – despite a cash rich position – and with all that support, the airline is playing hardball with it’s own people, threatening livelihoods across the UK.
It’s hard times for all airlines and reductions are inevitable in every corner of the aviation globe, but the latest moves of aggression show deeper, longer held desires than those brought on by needs from a global pandemic. More notably: it shows British Airways is making moves not out of necessity, but out of desire, all while enjoying funds meant to better the British public.
Over the last few weeks, news emerged that British Airways planned to layoff all cabin crew, and those who were invited to rejoin would only be able to do so with a new contract, at an average 60% of previous wage.
Basically, some 12,000 job reductions are expected, which may or may not be necessary to survive in the interim period of diminished demand, but those who do stay would be required to accept new and inferior terms. Now, it’s British Airways pilots turn.
The move was wildly unpopular even among the most loyal of BA staff and lead to calls from Parliament for potentially revoking some Heathrow slots from British Airways, since the vast majority were gifts from the UK government during its days as a flag carrier, before becoming a private entity. BA’s Parent company IAG is so bullish, it’s even threatening to sue the UK government over quarantine plans, in what may be the only positive move of the last few months.
Seeing the government posturing and union moves as nothing more than threats, British Airways has now turned its sights on pilot contracts, employing a similar approach to employment wishes in other departments, namely reductions.
Breaking: I’ve now seen an official letter stating @British_Airways hopes to also fire all pilots (like cabin crew) and get the remaining lot onto new contracts. When you thought you’d seen it all…#BAbetreyal pic.twitter.com/rp3IuZb3lF
— Gilbert Ott | GSTP ✈️🌴🌏 (@godsavethepoint) June 6, 2020
Pilots union members were informed that if the group does not accept 100% of the terms offered by British Airways, the airline plans to fire the entire workforce, rehiring the limited number of pilots it needs on lower wages and inferior contracts, much the same as it plans to do with cabin crew. Some crew members would experience up to a 60% reduction in pay, while being demanded to carry out more work.
BA’s intention to seek changes to terms and conditions is restated in the updated S188. However, crucially it states that if BA and BALPA are unable to reach an agreement, the company would seek to force changes by terminating the employment of all pilots and offering individuals new contracts
with associated new terms and conditions. We cannot begin to describe the level of disappointment and annoyance this has caused.
You can view the full official communication here: BACC Update Newsletter 6th June 2020
With headwinds of up to three years of diminished demand on the horizon, virtually all airlines are seeking to reduce headcount and limit costs, but no airline has gone as far as British Airways in seeking not only to reduce head count, but terminate all to force weaker terms for staff.
The fire/rehire move has also been extended to those in British Airways engineering bases, where threats of closing the base entirely are on the table, if weaker terms are not accepted. One could say any private company should not be limited in what they can, or cannot offer to employees, but it doesn’t mean the employees must take what’s offered, or that those on the outside should support the business, if moves become too sinister.
For many hearts and minds, even those of some ruthless customers, an equilibrium has been passed. It appears BA stepped over a line, and rather than tip toe back, is running head first to the other side.
With so few jobs going around in aviation, British Airways is banking on people crossing the picket line to remain solvent, knowing they have the upper hand in the negotiation. It’s all talk and games until it comes time to pay the mortgage. Receiving 60% of a previous salary could be better than nothing, but if the ferocious nature in which BA goes after employees from all elements of the business happens to unify the workforce, it could all backfire tremendously.
For now, it’s hard to support a business which is using a pandemic to not only make necessary cuts to survive, but to settle old scores in a time people need employment and opportunity the most.
Well, between having hosed loyal customers repeatedly for years and now turning on loyal staff, you can’t say BA is hiding something anymore. They’re offering a big middle finger to anyone who isn’t a shareholder and if you don’t like it then you can go pound sand. This passed distasteful a long way back. Not that it was needed but yet another reason to avoid them.
Eloquently put as always, Christian. Thanks.
BA staff are very well paid. The government loans will need to be paid back if less well paid UK taxpayers are not to subsidise these huge salaries.
It’s supply and demand, just the same as it was when the unions tried to wreck the company over the last few years when the boot was on the other foot.
I’m sorry, but I struggle to take seriously anything after a blanket statement of “BA staff are very well paid”. That’s absolutely not the case for all.
Agreed. Of course they are well paid. Pilots, in this case, are well paid by any standard, and union jobs by definition are getting paid at above market wages, otherwise the union wouldn’t exist. But if Gilbert is right, then I suppose nobody will want the new jobs offered at the lowered pay rates, and they’ll be forced to offer the same wages as before. We all know that won’t happen.
Keeping too many employees at too high a cost does not serve the public’s best interests. It’s not in the public’s best interests for the airline to be inefficient and unprofitable. Overpaying employees means that they will not be able to keep on as many employees as well. It would be better if they kept the number of employees that are necessary to fulfill demand, and at a rate closer to market rates, while the remaining resources are deployed doing something else of economic value, instead of just being dead weight.
I’m trying to determine if you’re joking or simply have a skewed view of things. I’ll respond based on the latter.
On the most basic level, you are obviously quite agreeable with taking a 60% decrease in your personal income. After all, that’s just supply and demand, right?Unfortunately, that’s not remotely feasible for other people.
As to unions trying to wreck the company over the past few years, I admit to being at somewhat of a loss. BA has been intensely profitable for years now, so whatever damage you’re imagining has little bearing in reality. Further, when BA decided to create a new tier of flight attendants, they did so at severely reduced wages, to the point where staff needed to sleep in their cars because they simply couldn’t afford to live anywhere near their job. While sleeping in your car out of necessity may qualify as well paid to you, I would disagree. To make matters worse, BA is actually lowering the pay for the car sleeping staff. Yes, BA actually feels that these people do too well financially.
If you wish to rail against ridiculously high pay you would be in good company, but complain about the executive pay at BA rather than the normal people.
This behaviour is ubiquitous now across many industries… don’t be fooled by middle/upper class journalists use of the term ‘gig economy’… it’s hard work, low pay and no security… few would choose it, but rather take it when it’s all that’s offered.
But this type of remuneration has existed for quite some time now at BA’s competitors too, and while that doesn’t make BA’s intended changes right, it cannot be viewed as a surprise. However, the manner of firing all to re-hire a more compliant cohort is questionable.
As someone who provides BA with a revenue stream yet still had to serve court papers on them to obtain EU rights/redress, I cannot see them being any easier on those they pay money too!
It appears that any semblance of decency at BA is in short supply, and that dear friends is a very sad state of affairs for any employer hoping to empower their staff to deliver excellence to the end-user.
BA got away with peddling a grossly inferior long haul business product for years – and charging huge extra fees to reserve a seat – primarily since many UK companies specified BA as their preferred carrier. The boasts about catering standards in premium classes are all hype – and the reality is that they have “run out ” of your choice anyway by row 2. It will be interesting how things pan out as the inevitable decrease in business travel kicks in. Note also that BA is the only major member of OneWorld not to extend the status of executive club members – it merely reduced the amount of points needed to maintain status at a time when nobody is flying.
I understand that the average tenure of the mixed fleet crew is just over a year because they can’t afford to live near the airport on their salary. BA don’t care about maintaining experienced crew and service standards – they know that candidates will be queueing to do the job short term because they just want to fly and will probably have to find second jobs to survive
If all salaries are to be reduced and many pilots and cabin crew are to loose there jobs, I presume BA will need far smaller numbers in upper and middle management and on a significantly reduced wage. Can’t see that happening.
I wonder if all directors are going to waive their rights to bonuses and accept similar reductions in their salaries
To be perfectly blunt, the Flying public should show solidarity with the BA workforce and boycott BA Travel altogether if they continue along this disgusting path. There are plenty of other Airlines to travel with.
While cleaning out old magazines during the lockdown I stumbled on an article written about altruism. It says that just after the World Trade center events in 2001, Southwest airlines founder decided to keep all personnel whereas American Airlines fired 24% of people shortly after the catastrophe. 4 years later an internal study was done which shows that the motivation of personnel and productivity was higher in Southwest than AA and the share value of Southwest Airlines nearly came back to it’s pre 11 September levels (92%) whereas AA was still at only 23% of that level. Just goes to show.
And how can BA ask clients to be loyal when it treats it’s loyal personnel like garbage?