British Airways Unions Reject Pay Proposal, Plan Next Move

(Bloomberg) -- Employee unions at British Airways urged members to reject the airline’s latest pay proposal and said they will begin preparing for a potential industrial action.

The biggest airline of International Consolidated Airlines Group SA has been facing a coordinated campaign for bigger salary increases from pilots, cabin crew and ground staff since November. The effort is challenging British Airways Chief Executive Officer Alex Cruz’s plan to beat down costs so the carrier can fend off competition from discounters including EasyJet Plc in Europe and Norwegian Air Shuttle ASA.

“Each union is increasingly concerned at BA’s unrealistic and inflexible approach to these negotiations and the company’s refusal to share with its own loyal staff the rewards of the success they have helped bring to the airline,” the letter said.

British Airways is continuing discussions with the unions, said Liza Ravenscroft, a spokeswoman. “Our pay proposal is fair, reasonable and reflects typical pay awards given by other companies in the U.K.,” she said.

The company presented a revised proposal this week after its previous overture was rejected. The latest one-year offer included a 2.7 percent increase to basic pay as of January 1, 2019, subject to a 600 pounds ($770) underpin plus a one-off payment equivalent to 0.5 percent of basic pay, or an alternative two-year offer with lower increases to basic pay.

The British Airline Pilots Association, Unite and GMB unions sent a letter, seen by Bloomberg, to members on Friday “strongly” recommending rejection of both proposals. On top of higher compensation, the unions demand enhanced profit-sharing arrangements and the introduction of employee share ownership.

Cruz, who joined in 2016 from low-cost sister brand Vueling, inherited a previous three-year pay deal that expired at the end of last year.

To contact the reporters on this story: Irene García Pérez in London at igarciaperez@bloomberg.net;Benjamin Katz in London at bkatz38@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Susan Warren, Brendan Case

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