British Airways Pilot Strike Holds Firm as Union Calls for Talks

(Bloomberg) -- British Airways pilots forced the cancellation of almost all flights on the second day of a strike Tuesday as their union called on management to make new pay proposals to resolve the dispute.

The unit of IAG SA -- which says the walkout is costing it about 40 million pounds ($49 million) a day -- scrubbed more than 1,600 departures and arrivals, after just five flights operated Monday.

With another walkout planned for Sept. 27, the British Airline Pilots’ Association said the solidity of the strike should come as a wake-up call for British Airways, and that there are no further negotiations currently planned after the current action ends just before midnight.

“Pilots are standing firm and have shown just how resolute they are,” Balpa General Secretary Brian Strutton said. “British Airways needs to start listening to its pilots and actually come up with ways of resolving this dispute.”

BA Chief Executive Officer Alex Cruz told the BBC earlier that its cockpit crews had been offered a deal that would have lifted remuneration 11.5% to 202,000 pounds, including benefits, making the pilots among the best paid in the world.

Balpa disputes the figures and puts the cost of settling the strike at 5 million pounds, “one-eighth of the cost of just one day’s strike action.”

While the disruption has hit hardest in London, where BA operates from its twin hubs at Heathrow and Gatwick, the outages extend to other locales such as Edinburgh. London City, popular with business travelers, isn’t affected as those flights are operated by the CityFlyer affiliate.

The strike is the company’s first involving pilots since 1979 and threatens the travel plans of customers at the tail end of the busy summer season. Affected passengers have been re-booked on other airlines where possible, offered alternate dates to fly, or been given refunds. About 195,000 customers were affected by the action.

Pilots went ahead with the strike following a breakdown in talks over a new contract. BA accused Balpa of not acting in good faith by making “an eleventh hour inflated proposal” which the airline said would cost an extra 50 million pounds. Crews argue that BA has ignored reasonable proposals for higher wages and improved benefits and that their demands amount to a fraction of that sum.

BA sent an email warning pilots that strikers will lose generous travel perks for themselves and their families for the next three years, the FT reported. The airline has issued “various threats” which suggest BA has no intention of helping to defuse the situation, according to Balpa.

The current demands relate to pay, profit sharing, and a share-awards program, and come after cockpit crew took salary cuts in the wake of the 2008 financial crisis to help bolster the airline’s finances, according to the union.

IAG reported an 18% jump in profit in the first quarter led by earnings at BA, the best performance by a European airline in the period.

The union called for the action after mediated talks with management at the state-backed Advisory, Conciliation and Arbitration Service ended without a deal. Cockpit crews voted to strike by a 93% majority in a poll in July.

Shares of IAG traded 2.9% higher as of 8:37 a.m. in London after falling 1.5% Monday.

Balpa is also campaigning at Ryanair Holdings Plc, where U.K. pilots plan to walk out for an additional seven days. Five days of strikes failed to disrupt schedules or bring the discounter -- which uses many non-unionized pilots on contract -- back to the bargaining table.

To contact the reporter on this story: Siddharth Philip in London at sphilip3@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, John Bowker

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