|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Monday 22nd of June 2009
June 18, 2009

BA union agrees pay cut for pilots in exchange for shares

by Kay Murchie

The British Airline Pilots’ Association (Balpa) is supporting British Airways (BA) decision to give pilots £13 million worth of shares in exchange for a pay cut and longer working hours.

The agreement comes after the airline admitted it was fighting for its survival amid the economic downturn and the new measures will save the airline £26 million a year in running costs.

Officials at Balpa are recommending the deal in a ballot to “help BA get through the current economic downturn.”

Under the terms, BA’s 3,235 pilots are recommended to agree to a package of wage cuts and productivity gains.

The shares will not be granted until June 2011, and cannot be sold for a minimum of three years after their allocation. In exchange the pilots will be given, from this date, shares worth £13 million if certain “company targets” are met.

Many airlines continue to experience a slump in demand with many forced out of business last year. According to the International Air Transport Association, passenger numbers plummeted 11% in March compared to the same month last year.

Last month, BA reported a pre-tax loss of £401 million for the 12 months to the end of March, compared with profits of £922 million the previous year. The loss represented the biggest since the company was privatised in 1987.

Earlier this week, BA asked 40,000 members of staff to work for nothing in a bid to cut costs. The group’s chief executive, Willie Walsh, has already confirmed he will work for nothing in July - giving up his monthly salary of more than £60,000.

There is also speculation that the airline is looking to close its final salary pension scheme.

Meanwhile, returning to today’s deal, a spokesperson for BA explained that the targets for the proposed deal would operate like a bonus scheme, with fewer shares becoming available if the company did not perform so well.

Finally, BA has been in discussions for many weeks with unions representing the 15,000 cabin crew and ground staff. The airline is looking to cut 2,000 jobs in this area in a further bid to slash costs.

Discuss this in the Finance Markets forums

Story link: BA union agrees pay cut for pilots in exchange for shares

Add to Bookmarks:




Tags: , Balpa, , , fighting, pay cut, , , , Willie Walsh


Previous: « Housing market confidence outweighed by unemployment fears
Next: Sharp increase in house purchase activity »

Visited 392 times, 1 so far today

No Comments »

No comments yet.

RSS feed for comments on this post.

Leave a comment