Thousands of British Airways staff agree to pay cut
June 26, 2009 ·
More than 1 in 6 British Airways staff have agreed to work for free, take unpaid leave or work part-time, the airline said Thursday after the announcement of cost-cutting measures last week.
“This is a fantastic first response. I want to thank everyone who has volunteered to help us pull through this difficult period,” Willie Walsh, British Airways’ chief executive, 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 ($16 million), the company said.
Of the volunteers, 4,000 workers chose unpaid leave; 1,400 workers took a switch to part-time work, and 800 will work without pay, British Airways said. A further 740 staff from outside the U.K. also chose one of the three options; BA is still sorting out the numbers from this category, the press office said.
British Airways last week asked its tens of thousands of staff to work for free for up to four weeks, spokeswoman Kirsten Millard said.
In June 16 e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave — but with the option to work during this period.
Last month, the company announced a record annual loss of £400 million ($656 million).
Walsh declared at the time there were “absolutely no signs of recovery” in the industry.
“In 30 years in this business and I’ve never seen anything like this. This is by far the biggest crisis the industry has ever faced,” said Walsh.
A spokesman for one of Britain’s biggest unions said last week its workers could not afford to work for free for a month.
“It’s all well and good for Willie Walsh to say he’s prepared to work for free when he earns four times in a month what they do in a year,” said Ciaran Naidoo, a spokesman for Unite.
He pointed out that the airline was not ordering staff to work without pay.
“It’s a request — you can take unpaid leave or you can work for free, and the chances of people working for free are very unlikely, but there might be some people who want to take unpaid leave.”
Demand for the airline’s passenger seats and cargo holds fell during the last financial year, while its fuel bill rocketed to almost £3 billion ($4.7 billion).
Walsh said British Airways’ woes were inextricably linked to the downturn in the global economy and that there had been no sign of any “green shoots” of recovery.
Like its premium-class competitors, British Airways is losing customers to cheaper rivals.
The airline’s premium passenger numbers fell 13 percent in the second half of last year, in line with the industry average.
Total traffic fell 3.4 percent and while the airline carried 33.1 million passengers last year, it was a drop of 4.3 percent from the previous year.
The dip in demand for British Airways’ flights has forced a switch in strategy at the airline.
From the end of last year, it has been trying to tempt passengers with lower fares, sacrificing profit per seat for “bums on seats.”
It plans to reduce capacity by 4 percent next winter by parking up to 16 aircraft.