British Airways has agreed concessions with one main union but the others may not comply so easily as the carrier launches a recruitment drive to hire 1,300 pilots and 2,000 cabin crew.
Ground staff of the transport workers' union, TGWU, voted in favour of a three-year proposal at the end of March, which included a two-year pay freeze and lower new entrant rates in exchange for the safeguarding of 2,800 jobs as long as efficiency targets are met.
The TGWU deal contributes some US$32.8 million to the BA Business Efficiency Programme (BEP), which aims to cut US$1.5 billion from its cost base by 2000. The job security part of the deal is particularly relevant in light of BEP's aim to shed 5,000 jobs through redundancies, outsourcing or retraining by 2000 from its non-core businesses.
BA has already announced 2,300 job reductions, most notably 500 from the sale of the ground fleet services division to Ryder; 750 from the closing BA's contract handling business; and 400 from 'internal re-engineering' in its cargo division. BA has also started a recruitment drive to hire 5,000 new employees. Sources close to the carrier say this includes 1,300 pilots over the next four years, along with 2,000 cabin crew.
Despite the threat of job losses to find the remaining 2,700 redundancies, other unions may not agree so readily as the TGWU to exchange concessions for safeguarded jobs. 'The biggest single challenge BA faces is to restructure at a time when its staff feels as if BA is doing well,' concludes analyst Matthew Stainer of Morgan Stanley.
Kevin Egan of white collar union MSF remains sceptical of any management promises: 'Job security is no more than is said at the time', adding that management has not asked his members for any concessions.
Job losses among pilots are also off the agenda, with all the new hires planned over the next four years. And Mike Sparham, assistant general secretary of the pilots union Balpa, says his members would only consider a wage-freeze in exchange for a US-style Esop.
The pilots' demands are likely to be high as sources close to the carrier say BA is looking for a 13 per cent increase in pilot productivity. BA will also need to use its persuasive powers to get pilots to agree to an average 10 per cent cut in the basic salary for British Airways Regional (BAR) pilots in Manchester, Birmingham and Scotland.
BA plans to replace BAR's current fleet of 18 B737-200s and 10 ATPs with a single type. General manager fleet planning Rod Muddle confirms the replacements are likely to come from BA's fleet of 33 B737-400s. These are to be redeployed from Heathrow as part of BA's two-year rationalisation of its Heathrow shorthaul fleet to three types - the B757, B767 and A320.
Source: Airline Business
