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Old June 20th, 2009, 06:18 PM   #161
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erm, what a load of rubbish. BA has only made this loss recently and it is because of a variety of factors, namely the slowdown in the economy hitting the mainly profitable business travellers. Economy passengers are relatively low yield in terms of profit. As far as I am aware, the majority of business travellers are located in and around the London area. BA have focused on a single hub strategy based around London because frankly, it works. The country is very London centric due to sheer population size. It would be uneconomical to have 3-4 bases operating small fleets internationally or even translatlantic.

The strategy has worked as well. BA has been one of the most profitable airlines in the world. So this asumption that because they have no bases outside London, no hubs elsewhere in the country is the reason why they are loss-making this year is a load of crap. The reason they have made a loss this year is because of fuel costs and a slow down in the world economy causing business travellers to travel less, BA's bread and butter.
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Old June 20th, 2009, 06:29 PM   #162
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Quote:
Originally Posted by amirtaheri View Post
erm, what a load of rubbish. BA has only made this loss recently and it is because of a variety of factors, namely the slowdown in the economy hitting the mainly profitable business travellers.
I clearly said it was one of the reasons for making a loss. Not the only reason.

Quote:
Originally Posted by amirtaheri View Post
Economy passengers are relatively low yield in terms of profit. As far as I am aware, the majority of business travellers are located in and around the London area. BA have focused on a single hub strategy based around London because frankly, it works. The country is very London centric due to sheer population size. It would be uneconomical to have 3-4 bases operating small fleets internationally or even translatlantic.
Well clearly other airline, who are profit making disagree...

Quote:
Originally Posted by amirtaheri View Post
The strategy has worked as well. BA has been one of the most profitable airlines in the world. So this asumption that because they have no bases outside London, no hubs elsewhere in the country is the reason why they are loss-making this year is a load of crap. The reason they have made a loss this year is because of fuel costs and a slow down in the world economy causing business travellers to travel less, BA's bread and butter.
BA only closed there bases in Glasgow and Manchester last year (2008). All of a sudden the London Airline is announcing record losses. Yes there are a number of reasons for BA being in such a state, the economy being one, but the lack of flights across Britain is another reason. Other airlines make profits from every corner of the United Kingdom. No reason British Airways couldnt.
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Old June 21st, 2009, 06:10 PM   #163
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Could British Airways really go bust or not?
It was close to midnight when Willie Walsh finally emerged from Waterside, British Airways’ sprawling Heathrow headquarters. The airline’s chief executive blinked in the lights of the waiting television crews, cleared his throat, and started to speak, his voice trembling.

“I am sorry to say that despite our efforts today we have been unable to secure further funding from our banks. The cash drain we sustained as a result of the rolling programme of industrial action by cabin crew and ground staff means we can no longer continue as a going concern. British Airways has this evening been put into administration.”

This may seem a far-fetched scenario, but not according to Walsh’s own doom-laden forecasts. BA is in trouble, with recession and the banking crisis – banks accounted for nearly 40% of BA’s business-class traffic – pushing it to its worst-ever loss in the financial year that ended in March.

In recent weeks Walsh has issued dire warnings to staff, saying that almost all the business is unprofitable, the current awful trading situation will only get worse and that the company faces “a fight for survival”.

Last week he went farther, inviting all employees to work for a month without pay – following the example set by himself and Keith Williams, the finance director. Staff have even been asked to drum up business by selling tickets to friends and family under the company’s “Hotline” scheme, with special cheap fares being made available last week.

In an intranet message, the company told workers: “Time is running out.”

So is it really all over for BA? Is the world’s (former) favourite airline, Britain’s (former) national flag carrier and the (former) operator of Concorde really heading for the scrap-heap?

Seasoned airline watchers say not, accusing Walsh of having an ulterior motive. His apocalyptic missives, they say, are designed to soften up BA’s unions during crucial talks about cost-cutting.

Walsh wants big concessions – and an air of crisis will help. This month has brought voluntary pay cuts from pilots and engineers (pilots still have to vote on the plan), but the battle continues with ground staff and cabin crew. Walsh wants it sorted out by June 30. Industrial action this summer cannot be ruled out.

Walsh has another audience in mind, too, governments and regulators on both sides of the Atlantic. BA is trying to stitch together a merger with Iberia, the Spanish airline, and a strategic alliance with American Airlines. The latter, a deal that would leave BA and American free to collude on price and scheduling on Atlantic routes, faces a rough ride from competition watchdogs. Its fate is in the balance, with a decision expected in a few months.

BA’s management would also like some breathing space from the British government on a swingeing rise in air passenger duty, which the airline claims leaves it at a competitive disadvantage to its rivals.

“In my view, he is attempting to manage the expectations of staff. His view is that there is a serious structural shift here, not just a cyclical blip,” said Douglas McNeil, transport analyst at Astaire Securities, the investment bank.

Other airline bosses say that if Walsh is crying wolf, he is taking a big risk. “Either they are in that kind of trouble, and could go bust, or they are not, and are trying to pull the wool over people’s eyes. You don’t ask staff to take a one-month pay holiday and risk having those kind of headlines unless it’s serious. If you do, it’s a very dangerous game,” said Sir Richard Branson, founder of Virgin Atlantic, BA’s biggest rival.

There may be more to this than a none-too-subtle attempt to frighten the awkward squad. Evidence can be found in the boom-to-bust nature of the airline’s trading over the past two years.

BA’s big strength has always been the Heathrow hub and its dominance of the lucrative business traffic across the Atlantic. In 2006-7, the final year of the financial-services boom, BA posted a record result. Corporate lawyers, merchant bankers and other masters of the universe thought nothing of paying £4,000 and more for a return trip to America, and the cash rolled in.

The airline announced a record profit of £922m , achieved an operating margin of 10% (something that had eluded BA managers for the previous two decades) and paid a dividend to shareholders for the first time since 2001.

Then the music stopped. The credit crunch and recession revealed the reliance on Heathrow and Atlantic business traffic to be not a strength, but a weakness. Business traffic dried up with companies, and in particular the big banks, slashing their travel budgets.

“Companies are travelling less, and spending less per trip,” said Amon Cohen, a business travel expert and contributing editor of Business Travel News. “With so many empty seats, airlines are falling over themselves to offer discounts of as much as 70% in business class. Looking ahead, it does not get much brighter. A survey of British corporate travel buyers published by the Institute of Travel & Meetings last week found that three-quarters of them expected their spending to fall even farther over the next 12 months.”

BA’s results for the 2007-8 financial year showed how hard and fast the downturn had hit. The airline recorded a £401m loss – £331m of which came in the final quarter of the year alone – and scrapped the dividend.

BA’s lifeblood “premium” traffic – first and business class – fell 17% in April, and by the same amount in May. Business-class fares across the Atlantic have dropped sharply.

In an intranet posting to staff last week, the airline said: “Many First or Club passengers are on greatly discounted fares that the airline has introduced to keep people flying. Currently there are Club World offers at £1,100 for Heathrow to New York return and some are travelling free (2 for 1 offer).”

Walsh’s problem is that BA is set up to make money at £4,000 for a return ticket to New York, not £1,100. He must now convince the airline’s unions that the current drop in traffic is not just a temporary blip, but, as he puts it, “a structural shift in the nature of our business”.

Time is not on his side. The airline’s cash balances are dropping, down from £1.8 billion last year to £1.3 billion at the end of March. This could be completely used up by the company’s outgoings as currently scheduled – £750m of capital spending, debt repayments of about £650m and interest charges of £150m.

There is little fat for Walsh to fall back on. Much of the company’s property was sold during its last restructuring, the so-called Future Size and Shape programme put in place by Walsh’s predecessor, Sir Rod Eddington. The worldwide airline slump means it is hardly worth selling aircraft.

In other industries, companies under pressure are raising cash as fast as they can to tide them over the downturn, either increasing their bank borrowings or asking shareholders to back rights issues.

BA’s board would probably opt for the latter, although analysts think there needs to be a successful resolution of the industrial talks before a fund-raising could go ahead. “You need to have a recovery story to tell, and that means having big cost reductions in the bag,” said one City source.

Walsh will move heaven and earth to preserve the airline’s cash by cutting spending, but he might find himself on a slippery slope if the company’s position deteriorates further – made worse, perhaps, by industrial unrest, worsening swine flu or terrorist action.

Bankers point to the examples of Sabena, the Belgian airline, and Swissair, both of which came to grief in the slump that followed the September 11 terrorist attacks.

“It can run away from you. There is a minimum cash level – in BA’s case I would say it’s about £500m – after which the banks start to tighten the screws, suppliers get nervous, the public gets nervous and your need for funding balloons out of control,” said one senior banker who worked on the restructuring of Swissair. IF BA were to get into serious trouble, a rescue would be far from straightforward. The board could seek a white knight, but there are two obstacles to a bid.

First, any buyer must be majority-owned and controlled by European nationals, a prerequisite of BA’s traffic rights. This would probably rule out Arab or Asian sovereign wealth funds, which otherwise would be tempted by such a prestigious brand.

The second obstacle is more daunting. BA has a large pension liabilities. An actuarial review of its two defined-benefit schemes is under way, with a final figure on the size of the black hole expected in September. Some analysts think it could be as much as £3 billion, nearly double the company’s £1.57 billion stock-market value.

Administration, which would allow the airline to shake off the pension fund, is also problematic, thanks to the industry’s regulated nature.

For an airline, administration would normally mean immediate revocation of its operating licence and the loss of its runway slots – BA’s most precious assets.

“Airlines cannot do business without an operating licence and an air operator’s certificate, which are granted in the UK by the Civil Aviation Authority,” said Hugh O’Donovan, barrister and leading aviation lawyer at Quadrant Chambers.

“For the administration to be successful and the business to continue to trade, there must be financial arrangements in place to enable the operating licence and certificate to be maintained.”

If they wanted to be sure of the business emerging intact, BA’s board would need to have a buyer in place before the crunch came. In other words, BA would have to do a prepack administration, the much-criticised type of insolvency that has come into fashion among retailers since the recession bit.

That kind of crisis may still be a remote possibility. Professional investors certainly think so. Respected analysts believe BA will ride out the recession and, again thanks to its dominant position at Heathrow, be best-placed of all airlines to exploit a recovery.

Andrew Light at Citi rates the shares a buy, with a target price of 260p (the shares closed on Friday at 136½p). Andrew Lobbenberg at Royal Bank of Scotland also has a buy recommendation, with a target price of 225p.

Walsh, however, who declined to speak to The Sunday Times this weekend, is still talking down the airline’s prospects, with another round of meetings scheduled this week with cabin crew and ground staff.

And it is worth bearing in mind that this recession has already demolished organisations that were thought to be fixtures on the corporate landscape – AIG, Lehman Brothers, Chrysler and General Motors.

Could BA join the list?

Jetting into another summer pay storm
Another summer, another industrial battle at British Airways. The airline has made a habit of stranding passengers at the height of the holiday season and exhausting the lexicon of the shop steward. There have been official strikes and stoppages, work-to-rules, wildcat action, “sick-outs” (staff going sick at short notice) and strikes at key suppliers. Sometimes the airline managers have not even needed the (non)cooperation of staff to ground aircraft, doing a good job themselves during the shambolic opening of Heathrow’s Terminal 5 last year.

Most of the disputes have included public discussion of how much BA’s staff earn, with a particular focus on the perks enjoyed by cabin crew and pilots. This time round has been no different, with figures from the Civil Aviation Authority showing that BA cabin crew, for example, can be paid twice as much as their counterparts at Virgin Atlantic. The average salary for BA’s 14,000 cabin crew, including bonuses and allowances, is £29,900, compared with £14,400 at Virgin Atlantic and £20,200 at Easyjet. BA's pilots earn an average of £107,600, compared with £89,500 at Virgin and £71,400 at Easyjet.

Reliance on such figures riles cabin crew, who accuse the airline of using them to win over public opinion in case of industrial action. Airline industry insiders are also reluctant to draw conclusions. In the case of cabin crew, they say, BA managers have bought off trouble over the years by increasing allowances instead of basic pay – rather in the manner that MPs were given generous expenses.

Senior cabin crew can now pick up several hundred pounds in allowances for long-haul trips. While the allowances are large, the insiders say what really matters is productivity, which is where BA falls down. “To get big cost savings at BA, you need to tear up the scheduling agreements with the pilots and cabin crew,” said one. These agreements govern the rest periods between trips. To do so, however, would almost guarantee industrial action – something at which BA has had a lot of practice.




http://business.timesonline.co.uk/to...cle6543863.ece
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Old June 24th, 2009, 12:17 PM   #164
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BA to offer IFE on new transatlantic A318 service

By Mary Kirby

British Airways (BA) is remaining quiet about the in-flight entertainment (IFE) it will offer passengers this fall on its new Airbus A318 transatlantic service, but assures that a system will be installed.

The carrier in late October will introduce all-business A318 service between London City and New York JFK. Communications specialist OnAir, which has a partnership with Thales, will provide mobile connectivity to passengers aboard the A318s, although initially voice calls will not be permitted.

IFE will also be available, says a BA spokesman, adding: "I haven't yet seen who the IFE vendor will be, but we've been advised it will be a similar system that is on the larger [Boeing] 747 and 777 aircraft - that is Rockwell Collins. Regarding the A318, I can't confirm yet."

BA last year inked a deal to fit its on-order Airbus A380 and Boeing 787 aircraft with Thales' TopSeries in-flight entertainment system. The systems are also being installed on BA's 777-300ERs.

The BA order "starts with over 40 wideobodies and extends to the entire BA widebody fleet when they decide to retrofit those aircraft," Alan Pellegrini, general manager of Thales' California-based in-flight business told media at a press conference last week at the Paris air show.

At that time, Pellegrini said BA had not yet elected an IFE supplier for the A318s.

http://www.flightglobal.com/articles...8-service.html
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Old June 24th, 2009, 06:10 PM   #165
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British Airways Changes Winter Schedule
23 June 2009

LONDON (Dow Jones)--British Airways PLC (BAY.LN) Tuesday announced its new Winter schedule for 2009 which includes some additional new flights from London's Gatwick airport.

MAIN FACTS:

-New winter schedule will include additional services from Gatwick to Bermuda (from five to six a week), Barbados (from nine to ten a week) and St Lucia and Port of Spain (from three to five a week).

-These are in addition to the previously announced new winter routes of Heathrow to Las Vegas and Gatwick to Montego Bay in Jamaica, Punta Cana in the Dominican Republic, Male in the Maldives, Sharm El Sheikh in Egypt and Innsbruck in Austria.

-Flights from Heathrow to Barcelona increasing to seven a day, from five and Prague to four a day, from three.

-For winter 2009, Pisa, Malaga and Gibraltar will move from Gatwick to Heathrow.

-Gatwick flights to Alicante, Palma, Malta, Madrid, Barcelona and Krakow will cease.

-British Airways will continue to fly from Heathrow to Madrid and Barcelona.
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Old June 24th, 2009, 06:10 PM   #166
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BA may stop shelling out for nuts
23 June 2009
The Daily Telegraph

BRITISH Airways might charge for peanuts and wine to cut costs.

Willie Walsh, BA's chief executive, said he was considering following rival airlines that charge for items once included in the ticket.

However, Mr Walsh told the staff newsletter BA News: "We cannot risk permanent damage by making shorter-term changes to our product that may generate limited revenues and increased negativity over the long-term''. But, he said: "There will be changes.''

Mr Walsh said BA, which suffered a pounds 401 million pre-tax loss last year, is fighting for survival. He has given the unions a June 30 deadline to agree to pay cuts.
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Old June 25th, 2009, 06:30 PM   #167
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British Airways says 800 staff to work for free
25 June 2009
Agence France Presse

Troubled British Airways said Thursday that 800 staff had agreed to work for free for up to one month, forming part of almost 7,000 workers who had accepted pay cuts to help the carrier slash costs.

"Nearly 7,000 British Airways staff have taken an early opportunity to apply for voluntary pay cuts in support of the airline's cost reduction programme," BA said in a statement.

"Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work by June 24. Their actions will save the company up to 10 million pounds (11.7 million euros, 16.3 million dollars)."
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Old June 29th, 2009, 08:35 AM   #168
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BA board join in Walsh's unpaid month but cling to free flights
27 June 2009
The Times

The entire 11-member board of British Airways has agreed to work for nothing next month but is clinging to the free, unlimited, first-class travel perk granted to all past and present senior directors and their spouses for life.

Until now, only Willie Walsh, the chief executive, and Keith Williams, the finance director, had agreed to give up a month's pay, cutting Mr Walsh's salary this year to £674,000.

The move is the latest in a series to cut the costs of the struggling airline, in which 7,000 cabin crew staff have volunteered for some form of pay cut and 800 of them have agreed to work for nothing for between one week and one month. It emerged yesterday that in doing so, the 800 would also forfeit up to two days' holiday entitlement.

In a statement yesterday, BA said: "The chairman and non-executive directors have volunteered to work for free in July. As stated in the company's public report and accounts, non-executive directors are eligible for non-contractual travel concessions. Non-executive directors book their flights themselves and do so like any other passenger by contacting the BA sales team. They do not take precedence over other passengers — if there is availability on the flight that they want to travel on, they can book a seat. If it is full, they cannot displace another customer."

BA's premium-class passengers were down by more than 17 per cent last month. BA said: "All full-service airlines offer free first-class travel to board members and directors. BA's non-executive directors' remuneration is at or below the market median. The non-executive directors have not had a pay rise since 2006."

All BA board members, past and present, can fly free in first-class anywhere in the world for life as a generous perk. Spouses also enjoy the benefit.

Current members of the board can take their children free, as long as their offspring are under 24. Under terms of the perk, directors are told that if there are paying passengers ahead also vying for the directors' seats, they will be downgraded to business class.

The issue of free, unlimited first class travel for life, has been a thorny issue for some time. Two years ago it emerged that Martin Broughton, the chairman, convened a board meeting to try to beef up directors' rights so that they had equal priority to paying customers. BA subsequently backed down.

About 6,940 staff in BA, including cabin crew, baggage handlers and engineers, have signed up to a variety of cost-saving schemes, all amounting to a pay cut, in a move that the airline has said would save up to £10 million. All BA staff were presented with a range of salary-reducing options from which to choose to cut the airline's costs. They were told that they had the option of choosing extended leave, becoming part-time, job-sharing, reduced hours and working unpaid.

Mr Walsh followed that up with an e-mail to BA's 40,000 staff, on June 11, defending his pay, in a move that angered lower-paid employees. His e-mail said: "You may have seen headlines about my remuneration in today's papers. To be absolutely clear, the only remuneration I will pick up this year is 11 months of my basic salary which equates to £674,000. In addition, I will receive 27,800 shares deferred from 2005/2006."

Steve Turner, national officer for civil aviation for the Unite union, said: "It beggars belief, asking low-paid employees to work for free — some are paid between £11,000 and £15,000 a year and are struggling to pay their rent or mortgages — while this lot [the board] continue to roam the world for free for them and their partners. It is unacceptable."

Although Mr Walsh and Mr Williams first offered to work unpaid in July, BA denied that either of them had pressed the rest of the board to do the same as a way of encouraging the entire workforce to do the same. A spokesman for BA insisted that the decision of the other directors had been made over the past few weeks and had been their choice.

BA lost £401 million in the year to March 31, its worst result in 25 years, amid high fuel costs and a fall in demand for high-margin first-class seats.

British Airways board members are keeping the perk of unlimited first-class travel at a time when staff are being asked to take what amounts to a pay cut
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Old June 29th, 2009, 03:34 PM   #169
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So far, so good - but what about all those first-class perks for the airline's old guard?
27 June 2009
The Times

The directors of British Airways have, belatedly, done the right thing in waiving a month's pay. But it has been a lengthy flight getting there.

Willie Walsh, the chief executive, announced his sacrifice more than a month ago. The airline sought volunteers among staff to do their cost-cutting bit two weeks ago. Yet only yesterday was it confirmed that all board directors would share in the pain. The timing could certainly have been better.

That said, however, BA's various cost-saving schemes are proving surprisingly popular. The GMB union has belittled the number of volunteers as tiny. Others would see it as astonishingly large: 6,900 staff have volunteered for remuneration reduction of one sort or another, be it taking unpaid leave, switching temporarily to part-time working or working for nothing for a short while.

Out of a full-time work force of 35,000, it comes across as quite a display of collective thrift. BA reckons it could save as much as £10 million. That may not be huge in terms of the airline's £1.4 billion basic pay bill but it will still pay the fuel bill on 325 jumbo flights to New York.

If BA really wants to underline the hair shirt message, however, it needs to go further. That means tackling the most cushy of boardroom perks — the offer of unlimited free first-class flights to directors and former directors and their spouses.

Willie Walsh's message that BA is fighting for its very survival is called into question every time another superannuated BA grandee is encouraged to turn left on entering the aircraft.

Arguably, the former directors, who continue to enjoy the perk, are more responsible for the airline's plight than the current board. It was they who over many years did too little to challenge inefficient working practices or cut back uneconomic pension promises — two nasty headwinds buffeting BA to this day.
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Old June 29th, 2009, 03:46 PM   #170
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Here we go again: Hundreds stranded as the BA gremlins strike again
Hundreds of British Airways passengers were left stranded at Heathrow Terminal 5 last night after the baggage system collapsed again.

Thousands more furious travellers faced severe delays and - amid chaotic scenes - many had to travel with only hand luggage.

Airport staff said the problems were caused by the same technical difficulties that plagued the disastrous launch of the £4.3billion terminal last March, when scores of flights were cancelled and thousands of bags went missing.

Workers also warned that the new chaos had left a backlog of thousands of bags which could take days to clear.

Angry travellers told how they missed their flights because they were stuck in massive queues.

Dr Caroline Morrison, 64, who hoped to fly to Glasgow with her husband Neil, 65, said: 'We queued for two hours and were told that our flight had left without us.

'No one has told us anything since then. We don't know if we are getting a hotel, a refund or put on another flight. We were told to just join this queue and we haven't moved since.'

Barry Goldstone, who was due to fly to Denver, Colorado, with British Airways, said it was 'absolute chaos', adding: 'We've received very little information. They don't seem to have any plan if anything goes wrong.'
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Old June 29th, 2009, 03:51 PM   #171
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Yikes ... and they still haven't fixed it?
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Old July 1st, 2009, 07:38 PM   #172
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British Airways seeks Acas help to settle dispute over massive cuts
2 July 2009
Guardian Unlimited

British Airways has asked Acas, the arbitration body, to mediate in the dispute with unions over plans to cut thousands of jobs and freeze pay at the struggling airline.

The two sides have missed BA's self-imposed deadline to reach an agreement on the restructuring by the end of June. Last night, talks broke down with the two sides unable to make any progress, despite negotiations going on for weeks.

It is understood that union representatives ended negotiations at a Heathrow hotel at about 6pm, some hours before the midnight deadline, but were prepared to continue the meeting today. BA decided not to attend, although a spokeswoman for the airline would only confirm that no talks were currently under way. No date had been set for the Acas talks.

Unite, the union representing most of BA's staff, did not return calls.

The airline wants unions to agree to a deal that would freeze pay for two years. The airline is also looking to cut 4,000 jobs, or about 10% of its workforce. It also wants staff to agree to wide-ranging changes to their terms and conditions.

BA says the cuts are essential to ensure its survival. The airline is making heavy losses, burning through cash at nearly £3m a day. It posted a £401m deficit last year.

But Unite has accused the BA chief executive, Willie Walsh, of trying to intimidate. Last week, union leaders said the airline had undermined negotiations after it announced that 6,940 staff had volunteered for a temporary pay cut, including 800 employees who will work for nothing for up to a month.
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Old July 4th, 2009, 06:46 PM   #173
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BA clips its wings with spending and capacity cuts
4 July 2009
The Times

British Airways announced plans last night to cut its spending by one fifth and to cut capacity as it tries to preserve cash.

BA, which six weeks ago reported a record loss of £401 million, also confirmed that it was looking to reduce its workforce by the equivalent of 3,700 full-time jobs this year. That is on top of the 2,500 posts cut by BA, which remains in talks with unions, between June last year and this March.

The airline said that it would cut capacity from April to October by 3.5 per cent, up from the intended 2.5 per cent reduction, and that it would cut its winter schedule by 5 per cent, instead of the previously intended 4 per cent. It added that it expected a five-month delay in the delivery of its first six Airbus A380 aircraft, although they will still be delivered in 2012, while arrival of the remaining six on order would be delayed by two years until 2016.

BA also said that it would ground its remaining three mainline Boeing 757 aircraft next summer and a further three Boeing 747-400s in winter next year.

In all, the airline said that capital expenditure during the current financial year, which ends next March, has been cut from £725 million to £580 million, adding that it was likely to remain at this level for 2010-11.

The news came as BA, which last week revealed that about 7,000 staff had volunteered to work shorter hours or take unpaid leave in support of its cost-reduction programme, reported that passenger numbers in June were down 3.8 per cent on the same month last year.

But in "premium traffic" - the first and business-class where BA makes most of its profits - the numbers were down 14.9 per cent. Non-premiuflyers declined by 1.3 per cent. The load factor, an indicator of how many seats have been filled with paying passengers, was 79.6 per cent, against 81.4 per cent in June last year.

The company added: "Market conditions continue to be very challenging, with trading at levels well below last year. However, on an underlying basis, both premium and nonpremium volumes and seat factors have now been stable for more than three months."

BA was the biggest climber on the FTSE 100 share index yesterday, its shares rising 6½p, or 5.5 per cent, to close at 121.83p.
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Old July 6th, 2009, 07:28 PM   #174
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British Airways staff reject cost-cutting proposals
7 July 2009
Guardian Unlimited

Cabin crew, baggage handlers and check-in workers refuse to accept management plans to axe thousands of jobs and freeze pay

British Airways workers have rejected management plans to cut costs through thousands of job losses and a two-year pay freeze.

A union spokesman said feelings among the airline workers were "running high" at a meeting held today of more than 2,000 employees, close to Heathrow airport. "They have sent a very clear message that they don't want us to make any further concessions that would lead to an assault on their terms and conditions," he said.

BA is struggling to cope with the downturn in air travel and in May reported losses of ?401m.

It has already stirred controversy by asking staff to take unpaid leave, reduce hours or even work for nothing for up to a month to conserve cash, a request that unions branded "insulting".

Fresh talks with BA are due to be held on Wednesday.

There is no threat of strike action but disruption over the summer is a clear possibility. BA was hit by an unofficial strike in 2003 over terms and conditions and was grounded again in 2005 by a dispute over catering staff.

BA pilots reached a deal last month that will see them taking a 2.6% pay cut and save the airline ?26m. The current talks cover other workers including cabin crew, baggage handlers and check-in staff. It is believed there are still wide differences between the management and unions.

The carrier had hoped to reach a deal by a self-imposed deadline of the end of last month, but has now called in the arbitration service Acas.

BA said last month that 7,000 staff had applied for voluntary pay cuts, including 800 who agreed to work for nothing for up to a month. BA chief executive, Willie Walsh, who has given up his pay for July, said it had been a "fantastic" response. Unions, though, have accused the airline's managers of putting workers under pressure to accept a cut, which the airline denies.

Unions have also noted that Walsh is far better placed to work without pay for a month ? his monthly earnings of ?61,000 are twice the average annual salary for cabin crew.
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Old July 8th, 2009, 06:52 AM   #175
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BA strike threat to holiday flights
Union angered by airline's 'work for no pay' deal

7 July 2009
The Daily Telegraph

BRITISH Airways passengers could have their summer holidays disrupted by industrial action after the airline's plans to cut thousands of jobs, freeze pay and make other savings were rejected by workers.

A strike by BA staff would cause chaos for hundreds of thousands of families planning to fly abroad during the school holidays, and the possibility of disruption moved a significant step closer yesterday after 2,000 cabin crew voted almost unanimously to reject the airline's cost-cutting proposals.

The vote took place at a packed meeting at Kempton Park racecourse, five miles from Heathrow, and came before crucial talks tomorrow between workers and BA management, which will be hosted by Acas, the dispute resolution service.

The recession has hit the aviation industry particularly hard, but workers are angry about plans to cut severely the starting salary of workers and the management's request that staff work without pay this month.

Unions said BA staff had sent a "very clear message'' that an "assault'' on their terms and conditions would not be tolerated.

If tomorrow's talks fail to secure an agreement, workers could be balloted on whether they want to take industrial action over the summer to force a resolution to the dispute.

Any strike would be four to five weeks away, a union source said, because the management needed to be officially warned of any ballot on industrial action and the vote itself would take some time to organise.

It would, therefore, come in the middle of August - the height of the holiday season.

A spokesman for Unite, which represents BA cabin crew, said: "Our members have shown that feelings are running very high. They have sent a very clear message that they don't want us to make any further concessions that would lead to an assault on their terms and conditions.''

The management of British Airways, led by Willie Walsh, the chief executive, has proposed a pay freeze and plans to cut 3,700 of the airline's 40,000 staff.

The unions - while accepting the need for a two-year pay freeze in the current climate - are fearful that redundancies will be compulsory.

The cost-cutting would also involve major changes to the contracts of cabin crew, which would see new workers - or many members of staff moving from long-haul to short-haul - starting on reduced hours at a salary of just pounds 11,000 a year. At the Kempton meeting, workers vehemently argued against this proposal, saying it would create a two-tier system.

The Unite spokesman added: "The management say this is what easyJet staff get paid. But British Airways is a premier airline and customers, when they book to go on a BA flight, expect premier customer service.''

The union are also angry about the airline's request for staff to volunteer to work without pay in July, which was taken up by 800. Unite said workers felt under pressure to accept the radical idea and pointed out that while Mr Walsh could easily afford to skip a month's pay, as he has done, many would find it impossible.

Though BA made record profits of pounds 922 million in the previous financial year, it posted a record loss of pounds 401 million in the 12 months to the end of March 2009.

A spokesman for BA said: "We are committed to talking with the unions to find a sensible solution. These are unprecedented times because of the economic climate. Tough decisions need to be made. We have received no formal or informal communication from the trade unions indicating industrial action in the coming months and any such talk is premature and speculative. All our flights are operating normally and it is very much business as usual.''
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Old July 12th, 2009, 07:45 AM   #176
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Fasten your seat belts, turbulence ahead
12 July 2009
Independent On Sunday

Threats of industrial action, disappearing passengers and swine flu - BA faces a dark summer, says Richard Northedge

British Airways chairman Martin Broughton knows Kempton Park racecourse well from when he chaired the British Horseracing Board. It has mixed memories for him, though. BA Dreamflight, which he owns with other BA executives and managers, started 4-1 favourite when it ran at the west London course this year but finished unplaced.

Last week, 2,000 of Broughton's cabin crew rallied at the racetrack and roundly rejected the airline's plan to cut jobs and pay. This weekend the cabin crews' union is locked in talks with management at Acas, the arbitration service. If no compromise is reached - and last week's vote was almost unanimous - BA could be heading for another summer of industrial chaos when it can least afford it.

On Tuesday Broughton will chair BA's annual shareholders' meeting in Westminster. Cabin crew traditionally act as attendants at these meetings, checking in investors and handing out the microphones. It may be a rough ride this year with Broughton facing difficult questions. Last year he reported record profits of £922m; this year he must explain how BA lost a record £401m. The dividend, cancelled in 2001 and restored last summer, has been cancelled again.

BA has been hit hard by the recession. Passenger numbers are down and revenue dwindles further as BA gives discounts and offers to fill seats. Sterling's weakness has made fewer Britons want to holiday abroad and more than one seat in five is now empty on the average flight. Cargo is down 10 per cent too but the front of the plane is the biggest problem. BA makes two-thirds of its profits from business and first-class passengers, but premium traffic is down 15 per cent on last year.

The airline has bumped from crisis to crisis recently but Broughton warns that this year's beats others. "September 11 happened against a background of strong consumer confidence and we had a functioning banking system," he says. "Now we have weak confidence, a very poor economic environment and a dysfunctional banking system. Then swine flu comes along."

With chief executive Willie Walsh he is undertaking a three-year change programme that means cutting capacity, costs and staffing.

It costs £9bn a year to keep BA flying but the £2.2bn pay bill was last year overtaken by fuel costs, which jumped £1bn to £3bn. And even now oil prices are below their peak, BA made losses because it hedged against last year's levels. After cutting 2,500 jobs last year, BA wants to shed another 3,700 of its 42,400 employees. Pay rates can be twice those of rival airlines, however, and BA wants not only a two-year pay freeze but also the right to recruit at lower wages. Unions say that creates first- and economy-class workers.

The CBI, where Broughton has just moved from president to vice-president, last week proposed a scheme that would pay workers for not working. At BA, however, he is advocating working for no pay. Walsh and finance director Keith Williams are setting the example by forfeiting a month's salary and 7,000 staff have volunteered for this or other schemes that could save £10m, but unions have reacted with derision. "It's hard to exaggerate the severity of the current economic conditions," says Walsh.

Capacity, already cut once, is being trimmed again as passenger numbers fall. The airline's three remaining 757s will be grounded next summer with three 747-400s in winter 2010. The Gatwick fleet is being cut from 32 to 24 planes with services to Alicante, Madrid, Barcelona, Palma, Malta and Krakow suspended, reducing short-haul flights by 10 per cent.

But the serious money will be saved by cancelling orders for new planes. Pilots have been told 16-year-old Boeing 737s will have to keep flying. BA's future capital commitments of £4.8bn compare with a stock market value that has fallen nearly 80 per cent in three years to £1.4bn. Delivery of six Airbus A380s has been postponed until 2012 with the other six delayed for two years until after 2015.

The current year's capital budget has been slashed from £725m to £580m, but debt has risen by £1bn over the past year to £2.3bn, and off the balance sheet is a rising pension fund deficit. A recovery programme agreed with unions three years ago that involved an £850m one-off contribution and will see another £180m payment this year has not closed the gap. It was £1.2bn last year but a revaluation currently under way will at least double the deficit and could take it to £3bn.

Directors were annoyed when Virgin founder Sir Richard Branson said BA should not be bailed out. Williams says: "After making inquiries, our directors have a reasonable expectation that the company has adequate resources to continue operating for the foreseeable future."

But Walsh worries that today's problems are not temporary. "The industry rarely recovers to the pre-crisis trend," he says, looking back to when he entered aviation in 1979. "And even when it does - and the only example of that was post 9/11 - it takes a long time; in fact it took seven years to get back to trend. We see this as a structural shift in the business."

Walsh considers consolidation a solution but his attempt to form an alliance with American Airlines is bogged in bureaucracy, his proposed union with Qantas came to nought and the year-long merger talks with Iberia have stalled. "Airline mergers are difficult, not impossible," he says. "I'm under no pressure to pursue a deal." He blames corporate governance issues but Broughton admits: "Our pension deficit is a concern to Iberia."

BA has considered charging for catering, luggage or other services like no-frills rivals such as Ryanair, whose boss, Michael O'Leary, last week rubbed salt into BA's wounds by claiming the "world's favourite airline" tag. Walsh argues the extra revenue does not offset the long-term damage to the brand.

He is determined BA remains a "global premium airline" - despite the current shortage of premium paying passengers. Indeed, despite axing other flights from London City Airport, BA will in September start a 32-seat first-class-only service to New York, backing up the Paris and Amsterdam flight to the US city operated by its Openskies subsidiary.

September is a far away, however. By the time Broughton chairs this week's shareholder meetings he may know the result of the Acas talks . "The next few months will be uncomfortable for everyone within our business," says Walsh. That could include passengers as well as shareholders.

BA’S TIMETABLE OF WOES

2003 Cabin crew wildcat strikes over pay and rotas

2004 Strike over electronic clocking-in by check-in staff costs £50m Staff shortages and strikes leads to 1,000 August flights being cancelled

2005 Sympathy strikes by ground staff over dispute at Gate Gourmet on-board catering supplier causes cancellations, lost luggage and foodless flights

2006 New government-imposed security measures cause massive airport delays

2007 Baggage handling staff dispute and cabin crew strike ballot over pay and pensions cancel 1,300 flights

BA fined £275m for price fixing

2008 Pilots threaten Easter strike Heathrow Terminal 5 fiasco and baggage handling failure causes 500 flights to be cancelled and delays others at £50m cost

2009 Cabin crews reject survival plan
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Old July 24th, 2009, 12:00 PM   #177
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British Airways Launches Online Comparison Tool

British Airways has launched an online value calculator to help highlight the extra bills charged by no frills airlines.

Crawley, West Sussex, UK (PRWEB) July 24, 2009 -- British Airways is taking the fight for customers to the no frills carriers by launching a 'value calculator' on ba.com. The new tool will allow customers to check the true cost of Ryanair and EasyJet's added charges versus the value of BA's full service.

Richard Tams, head of UK & Ireland sales at British Airways, said: "With BA, the price you see is the price you pay. It's been well documented that some of the no-frills carriers charge for a range of 'extras' that we consider to be part of our core service, from checking in a bag to food and drinks on board. We're just making these transparent for customers.

"On a round trip customers can be paying up to £375 on Ryanair and £79 on EasyJet for these 'extras' in addition to their fare. We think people will be pleasantly surprised when they see what great value our fares offer. The no frills carriers claim they're always cheaper. Our calculator shows they are not."

The British Airways value calculator (http://www.ba.com/valuecalculator ) can be customised depending on how the customer is planning to travel. The system enables customers to select the various features they want for their flights (http://www.britishairways.com/travel/home/public/en_gb ) - such as checking in at the airport or online, selecting a seat 24-hours before they fly, choosing the size of hold luggage they are taking, or opting for food and drink on board. It also compares the prices depending on the type of card used to make the payment and the size of hand luggage allowed on. It will then calculate what Ryanair, EasyJet and BA will charge in total for those options.

With extra charges of £375 possible on some combinations with Ryanair, British Airways are looking to make passengers aware that while the price BA advertises is the price paid by the customer, 'no frills' airlines often charge extra hidden costs.

http://www.prweb.com/releases/2009/07/prweb2668634.htm
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Old July 24th, 2009, 12:03 PM   #178
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British Airways talks with unions break down

Fears that British Airways could face a strike rose last night after talks between the airline and unions broke down.

The carrier is trying to persuade the GMB and Unite to accept a wide range of cuts it says are vital for its survival, after it lost £401 million last year.

The failure to come to an agreement means that there will be a two-week cooling off period. The unions are demanding talks with a higher level of management.

Both unions have already agreed to accept a pay freeze and unpaid leave, but BA is seeking further economies including job cuts and radical changes to terms and conditions.

The unions say they offered a package of savings at the start of the year which, had they been accepted, would have led to at least £30 million in savings.

There is mounting pressure on the union leaders from the rank and file for a ballot, but up to now negotiators have resisted doing so, insisting that they are not in a formal dispute with BA.

The pilots union Balpa has agreed to accept a pay cut in return for shares.

According to Willie Walsh, the airline's chief executive, BA is facing the biggest crisis the airline was privatised as aviation as a whole struggles with the impact of the global recession.

http://www.telegraph.co.uk/news/ukne...reak-down.html
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Old July 24th, 2009, 12:12 PM   #179
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At Heathrow.
Credit to Thomas Brackx

Credit to Anthony Jackson
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Old July 31st, 2009, 10:04 PM   #180
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British Airways Seeks Investor for Business-Only OpenSkies Unit

By Steve Rothwell

July 30 (Bloomberg) -- British Airways Plc is aiming to sell a stake in its OpenSkies subsidiary in order to bolster the finances of the business-class only carrier as the recession crimps demand for premium travel.

While British Airways isn’t planning to completely part with the unit, it can’t rule out selling a majority holding, OpenSkies Managing Director Dale Moss said in an interview. Reynold Partners has been hired to help with the plan.

“We’re evaluating opportunities to look at additional investors,” Moss said yesterday by phone from the unit’s Paris base. “We’re not saying we need it, we’re not saying we’ve got to have it. It’s good for OpenSkies as a business and it’s good to have a varied shareholder portfolio.”

OpenSkies has been providing business-only flights between the French capital and New York since June last year, claiming a 25 percent market share on the route. The division said July 24 it would terminate transatlantic services from Amsterdam in August after a 12-month decline in premium traffic worldwide.

British Airways said July 17 it had raised $1 billion in new funding to help cope with the slump in demand. The London-based airline is also in talks with unions to slash as many as 4,000 jobs and delaying aircraft deliveries and cutting back on in-flight catering to pare costs.

The OpenSkies fleet of four Boeing Co. 757 single-aisle planes operates from Paris with 74 percent of seats filled, Moss said. The figure is 60 percent on the Amsterdam service.

Lower Costs

The executive said the slump in premium travel may be bottoming out and that OpenSkies will benefit from any rebound as it isn’t weighed down by the higher labor costs of full-service airlines such as its parent company.

“I’ve seen a lot of different rumors,” Moss said. “BA is not trying to sell OpenSkies. We are looking at opportunities for expanding and trying to get additional liquidity. I think every big company does that.”

Moss said the state of the business market will be easier to discern once the summer season is over.

“We will learn a lot more when the September and October numbers come back,” he said. “We believe they will get better, but to what extent I don’t know.”
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