British Airways Pilots Call for Strike Ballot on Pay Deal
IAG Falls After BA Pilots Call for Strike Ballot on Pay Offer
(Bloomberg) --
British Airways pilots called for a strike ballot after unions rejected the latest pay package from management. Shares of IAG SA, owner of the airline, reversed earlier gains.
“We are urgently considering next steps and will make a further statement later this week,” Brian Strutton, general secretary of the British Airline Pilots Association union, or Balpa, said in a statement.
British Airways faces a coordinated campaign for bigger salary increases from pilots, cabin crew and ground staff in a challenge to its efforts to beat down costs. The Unite and GMB unions also rejected the airline’s three-year offer, as the labor groups seek to agree the first-ever joint pay deal with BA.
Members of Balpa voted against the pay proposal of an 11.5% rise over three years and approved a formal strike ballot, the union confirmed to Bloomberg. Salaries haven’t reflected profit gains following a drop in oil prices starting in 2014, the union said, while claiming that company morale has suffered from higher density seating, paid-for food on shorter flights and cuts to back-office staff.
IAG fell 0.3% at 467 at the close of trading in London, after rising as much as 1.2% earlier.
British Airways has been pushing through cost cuts to fend off discounters including EasyJet Plc in Europe and Norwegian Air Shuttle ASA on long-haul routes. IAG reported an operating profit of 135 million euros ($153 million) during the first quarter, compared with steep losses at competitors like Deutsche Lufthansa AG and Air France-KLM Group.
British Airways’ offer was “fair and generous” while the airline remained open for discussions with all trade unions, a spokeswoman for the carrier said. “We believe our pay and benefits for pilots are among the best in the industry.”
The three labor groups “stand ready” to consider a revised proposal from BA, the labor groups said in a joint letter to members. As a gesture of goodwill, Unite took down a video from Youtube that criticized British Airways’s treatment of its staff at Gatwick Airport, a union spokesman said.
The current three-year labor agreement expired at the end of last year as talks dragged on.
To contact the reporters on this story: Benjamin Katz in London at bkatz38@bloomberg.net;Lucca de Paoli in London at gdepaoli1@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Elisabeth Behrmann
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