By Steven Rothwell May 25 (Bloomberg) — British Airways Plc scrapped flights for about 25,000 people for a second day, with no sign of a return to talks between the airline and the union representing cabin-crew workers over the wage bill and staffing levels. The company’s flight attendants walked out yesterday, the start of a third round of strikes, after negotiations between Chief Executive Officer Willie Walsh and the Unite union broke down at the weekend. No formal discussions have been held since then, even though both sides say they’re prepared to meet. The walkout leaves 40 percent of long-haul services from the company’s hub at London Heathrow, Europe’s busiest airport, grounded. Two strikes over seven days in March cost British Airways 43 million pounds ($62 million), contributing to a 425 million-pound fiscal-year loss that was the carrier’s biggest since it first sold shares to investors in 1987. “I don’t expect BA to be deflected from its aim, which is to push through the cost-reduction plan and the right-sizing of the business,” said Stephen Furlong , an analyst at Davy Stockbrokers in Dublin with an “outperform” rating on the London-based company. “It’s going to be very focused on that.” Shares Fall British Airways was trading down 4.1 percent at 182.4 pence as of 10:25 a.m. in London. The stock has dropped 2.4 percent this year, valuing Europe’s third-biggest airline at 2.11 billion pounds. This week’s stoppage will run through May 28 and is to be followed by further five-day strikes starting on May 30 and June 7, Unite says. The airline took out advertisements in U.K. newspapers including the Times today showing a departure board listing the 120 destinations that the carrier flew to yesterday. “Unite wants to ground British Airways. It won’t,” the ad says. “While this strike means we may have to reduce the number of services each, we will fly the majority of customers to where they were booked to go.” Unite has said the most recent proposal from Walsh on crew complements and other savings could form the basis for a deal, leaving as the main sticking points demands that the CEO also reinstate travel benefits for strikers and take back workers dismissed or suspended during the industrial action. “We want to get some sense back into negotiations,” Brian Boyd, Unite’s national officer for aviation, said in an interview on a picket line near Heathrow yesterday. “Willie Walsh has to make sure he is being seen to compromise.” ACAS Role The disciplinary issue might be resolved through the involvement of the Advisory, Conciliation and Arbitration Service, the U.K.’s state-sponsored mediator, which could ensure an “impartial process,” Boyd said. Talks at ACAS’s London base on May 22 were disrupted by people who the mediator said may have been delegates at a nearby Socialist Worker Party conference. The next day, hours before the strike was due to begin, Unite leader Tony Woodley said he’d suspend the strike if Walsh agreed to reinstate travel perks. British Airways is “open to talks,” spokesman Michael Johnson said in an interview. “Our commitment at the moment is to ensure that our contingency plans are in place.” The carrier will today operate about 60 percent of long- haul services from Heathrow plus 50 percent of European services, Johnson said. Routes from the capital’s Gatwick and City terminals aren’t affected. All short-haul destinations were served with at least one flight yesterday, together with 85 percent of intercontinental routes, British Airways said in a statement. Strike Losses This week’s walkouts, part of the first sequence of strikes at British Airways since 1997, could cost the company more than 100 million pounds, based on the March losses. That’s equal to more than 40 percent of the 230 million-pound operating profit analysts say the carrier will earn this year. Under the strike timetable, British Airways is seeking to fly passengers who have bought tickets using planes staffed by non-striking workers and people from other parts of the company. Walsh said on May 21 that volunteers have now been trained to operate the company’s Boeing Co. 747 aircraft, having helped crew the 777 fleet during the March walkouts. Leased Planes Walsh is also using eight aircraft, complete with crews, rented from charter companies, something that’s becoming harder as the industry nears the peak summer season, Derocles said. British Airways has also rebooked some of the 30 percent of passengers it can’t accommodate with 53 carriers including allies American Airlines and Iberia Lineas Aereas de Espana SA and rival Emirates. Walsh says the British Airlines Stewards and Stewardesses Association branch of Unite “is not serious” in trying to reach an agreement. The executive said in a statement May 23 that Woodley had lost control of that part of the union. British Airways and Unite have been discussing changes to staffing levels and future pay grades since February last year. The current dispute flared up in November, when Walsh cut crew numbers on long-haul flights without the union’s approval. To contact the reporter on this story: Steven Rothwell in London at srothwell@bloomberg.net
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British Airways Scraps Flights a Second Day as Dispute With Crews Drags On
