[VintageKrug]

Douglas McNeill, transport analyst at Charles Stanley, said a cause for optimism was that there had been “something of an uptick in demand” from business travel in recent months, he added, and a loss below £600m (actual loss was £531m) has been regarded as good news by investors.

BA shares rose in early trading, before falling back. Shares are up 20% on this time last year.

BA also has significant cash reserves that mean it can continue operating for some time despite losses. The airline said it currently had £1.7bn in the bank.

Further structural cost savings were already being realised, resolution of the strikes would confirm a long term reduction on costs, and synergies from the Iberia tie up and AA merger (to be complete by October 2010) should see further cost opportunities.

BA said it made an operating loss of £145m in the fourth quarter — down from £164m in the same quarter a year ago.

[Cwyfan]

It is no doubt WW’s trade union background that was particularly attractive to employing him from a shareholders’ point of view, but no doubt Unite see that as an extra challenge for their own CV’s

When Simpson of Unite says, “that the union would do whatever it could to settle its differences with BA”…perhaps he could be more specific about what that is, particularly when his next sentence was “the two sides are within a sliver of an agrrement”…perhaps the sliver is what they should do

Does he really expect us to believe anything else that he says when he says the reason for the one day pause between the stoppages was to allow “BA to go the extra mile”… no benefit to his members then?

Seems he does not want to move then and “do whatever it could to settle its differences with BA”

[MartynSinclair]

BA does not have £1.7bn cash reserves,………… whilst it has a gaping hole in the pension fund.

Charles Stanleys transport analyst comment re the upturn is historic and not current. He only needs to go into T5 to see how current his comments are.

I remember the comments about Pan Ams losses – described by some comedian as a “negative profit”!

I still dont get all the support for WW when the company has lost £580 million, a bit like two 747-400 going missing from stock. Added to which is the continual downward spiral casued by the economic effects of the strikes.

[VintageKrug]

There is not a gaping hole in the pension fund. The Pensions scheme is not in the same pot as BA’s Corporate cash.

A deal was reached with the Unions (further proof of WW’s ability to cut a deal) in March which addresses the deficit and has put a plan in place to fully fund the scheme – while keeping the final salary scheme open to members (one of the perks this strike endangers, and not just for LHR striking crew but for everyone in the airline – another reason pilots and ground staff are right to volunteer to keep the airline flying.

Here is the link:

http://www.ft.com/cms/s/0/706f3bf4-310b-11df-b057-00144feabdc0.html

The quote from Douglas is absolutely current, and indeed was stated only yesterday.

Part of the reason for the broad support of WW is that he has countered revenue decline with cost cutting; addressing the cabin crew cost issue is part of that.

You can’t blame WW for the economic downturn; BA has long been geared to the business traveller and suffer more than most in a downturn, but it also profits more in an upturn as a consequence. Even if you do blame him for the strikes (which is your position and one on which we agree to disagree) their impact is not the cause of the “downward spiral” – and indeed prior to this set of Industrial Action the last strike at BA was in 1997, which is pretty impressive going.

He has also steered BA through to a merger with Iberia, and a merger with American Airlines (always the big prize) will happen in October 2010. The will generate significant continuing cost synergies.

Indeed AF-klm recently announced losses of €1.56billion, which does rather put things into context.

This industrial action, while material, is a blip in the scheme of things, and having borne all the pain and negative publicity it is essential WW gets the deal his airline – and indeed his LHR-based cabin crew – need to ensure the ongoing profitability of the airline.

[MartynSinclair]

VK

The pension fund is not the same as corporate cash BA. But there still exists a massive shartfall in the schemes ability to service it potential obligations.

The pension hole is part of the old style defined benefits scheme. As you well know VK, the employer pays a contribution to maintain benefits, caluculated by actuaries. BA can no longer afford to make the full payments/contributions and with the economic downturn the value of the assets has understandably fallen.

So, if BA has £1.2 billion in the bank, this should be earmarked for the defined benefits pension scheme, rather than being kept back for WW and the rest of the board’s pension or bonus pot.

VK – you totally miss my point re WW. I do not blame him for the strikes, I blame him for not resolving the strikes. Stand firm, stand solid, but to stand arrogant is not the answer.

The unions have pressed the self destruct button, I dont beleive that they have just cause to strike, but i do beleive in no uncertain terms that WW stratergy of burying his head in the sand hoping the issue will go away is the wrong stance to take. He is the CEO of British Airways, earning in excess of £750k per year. For that sort of money, he can get of his throne and remember his routes as both a union member, a failed airline pilot and go out among his masses, union and management alike and try to find (not necerssarily negotiate, but find) a solution through something he must surely have learnt in nuresery school, which is C O M M U N I C A T I N G. Silence will only bring more disaster.

“This industrial action, while material, is a blip in the scheme of things, and having borne all the pain and negative publicity it is essential WW gets the deal his airline – and indeed his LHR-based cabin crew – need to ensure the ongoing profitability of the airline”

Your statement above is very very true – the difference between the two of us the way we would get to the end game. Your position (as an economist I beleive you once said you were) is to stand fast, dictate to the unions and not waver one bit to the extend that if it cost another £200 million or more, who cares, its only a blip.

My view is to forget any personal battles and looks of innoncence and make an effort, even using PR and spin, to communicate more effectively with the idiots at BASSA / Unite and create a solution.

As i previously said VK, a long term solution is wasted becasue once WW does go and Unite/Bassa falls, we are back to needing another new stratergy. Get BA flying, get BUMS on seats and get good employer relations – and this will provide a perfect opportunity for BA to move forward.

[VintageKrug]

Did you click on the link I posted?

The deficit in the pension scheme has been addressed – in the long term – by a repayment scheme in part paid by staff and in the main by BA, to the tune of £330m per annum until fully funded.

BA is under no obligation to pay back the deficit in one go – indeed it would be crazy to do so.

As a shareholder, should cabin crew persist in striking, I would imagine all BA crews will have to suffer the closure of the final salary schemes; should the nuclear option be triggered by union intransigence, then of course all is immaterial as a NewCo would emerge without any pension liabilities, to the detriment of all cabin crews, which would be a terrible shame.

I would remind you that Gatwick, London City and 60% of LHR longhaul services ARE flying, and indeed I will be off via LHR tomorrow, returning to LHR on a BA plane staffed with BA people, right in the middle of the strike. I then have two other sectors in the following days.

WW’s excellent leadership has lead to superb contingency, and that contingency is supported by many BA cabin crew as well as other BA volunteers. He is in a very strong position to carry this through as he will be quitting as BA CEO in October anyway, as his post will be taken over by Keith Williams and WW will become CEO of International Airlines Group, the TopCo holding company for BA/IB.

He is deffo the right man to play “bad cop” but actually, as John Phelan states, if you’d actually followed this dispute in detail you’d realise that WW has done plenty of negotiating and conceding, not just on the cabin crew but also with other areas of BA staffing, including at Gatwick which Unite/BASSA also represents and itself has already agreed the new T&Cs which WW is seeking to have at LHR.

[JohnPhelanAustralia]

I am constantly bemused that several people on this thread persist in stating that BA/Walsh refuse to communicate or negotiate with Unite.

From all the comments made in the media – including and particularly those made by Unite itself – it is quite clear that both sides are communicating, and have been for months. Just because they haven’t reached an agreement doesn’t mean they are not talking!!!!

Even today’s comments from Unite support this (i.e. the line about them now being only a “sliver” away from agreement). What would be most helpful would be for both sides to state publicly what the remaining, unresolved issue is. The posts on this forum seem to suggest it is the reinstatement of the staff travel perk to the strikers. If so, it would be useful for Unite and BA to state this publicly. (I suspect Unite would be loathe to do so, however, because it would make the union’s position totally unsupportable in the court of public opinion …..)

[VintageKrug]

And legally liable for the costs BA has incurred during the strike, as that was not the balloted reason for striking.

A Peston/Walsh interview that clearly sets out that it’s not WW’s intransigence, it is BASSA which is not in alignment with Unite. Unite have accepted BA’s concessions, BASSA have not:

http://news.bbc.co.uk/1/hi/business/8696302.stm

[MartynSinclair]

John Phelan Australia

Yes, you are right, they may be communicating, but as you say, not very effectively. I stand corrected.

Martyn

[Cwyfan]

As BASSA are part of UNITE, the difference escapes me

[VintageKrug]

Indeed – BASSA is part of Unite, but BASSA is a “branch” and is far more militant than Unite.

Normally, Unite would have the authority to tell BASSA to accept the offer being made, but BASSA negotiated T&Cs when it joined Unite (I think a few years ago) which, because of its size and the amount of dues it pays to Unite, gives it special independence and the power to call strikes independently of Unite leadership, even though it is Unite members who are called upon to pay those who choose to strike £30 per day of so-called “strike pay”.

Part of the history of this dispute goes back to Unite and BASSA refusing to sit in the same room with each other; BA would obviously only negotiate with a single party otherwise there would never have been any agreement reached. The Union alleged that WW would not negotiate with them because of this…in fact it was their refusal to negotiate as one organisation, or indeed speak to each other, which meant that no negotiations actually took place, despite BA’s door being open all the time.

That sort of thing gives you a flavour of the childishness and intransigence BA Management have had to put up with.

[VintageKrug]

Some quite shocking scenes this evening as WW was cornered inside the ACAS building by a mob; to be fair Tony Woodley disassociated himself from them, but still gives you even more of a flavour of what BA and WW are up against:

http://news.bbc.co.uk/1/hi/business/10140911.stm

Could this be the “guerilla tactics” that BASSA secretary Duncan Holley threatened?

[MartynSinclair]

It could very well have been organized by BASSA ……… if the mob were trespassing, I am sure that the police will press charges and then the facts will become public knowledge in the court case to follow: However, as with much about this case, I guess it will all be swept under the carpet “not in the public interest to prosecute” !! So no one will be any the wiser who was behind it. All too easy to speculate.

[MartynSinclair]

“It claims Mr Walsh withdrew from further talks this morning – but the airline has said it is still prepared to return to the negotiating table”.

Looks like common sense will prevail at the end of the day as BA Management appear to have lifted their heads out of the sand.

The quote came from Sky News web site.

[JonathanCohen09]

Surprise, Suurprise…Unite/Bassa have not accepted the latest (and surely the most primitive) of deals, to re-instate Staff Travel albeit without their prior seniority. Let’s remember they were warned that they would loose it if they went on strike.

Repercussions: disruption to passengers and major harm to (well…) great British brand.

Well done Unite/Bassa.

It works both ways GEO!!

[Author]

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