Inks deal with union for three year contract after labor accepts strict absence policy

British Airways and its labor unions averted a 24 hour strike next weekend by signing a new three-year labor agreement that, among other issues, implements a new strict absence policy that will benefit the airline. The news of the agreement lifts the shadow of uncertainty over British holiday travel.

The contract will also increase pay, giving employees an 8.5 percent raise over three years, backdated to 2003, and an $1800 bonus payable between now and September 2006.

"The threat of industrial action against British Airways was lifted today following agreement with its unions on a three-year pay deal," a British Airways spokeswoman told Reuters.

Labor unions immediately cancelled strike plans, which lifted the specter of another summer of travel disruptions. Last year wildcat strikes in the aviation industry disrupted the travel plans of more than 100,000 travellers in Britain.  "We are pleased that holiday makers can now relax and pack for their summer break," Transport & General Workers Union national secretary Brendan Gold said.

Mike Street, MBA's director of customer service and operations, said the agreement was reached after the labor unions accepted a stricter absence policy that will take effect immediately. The new policy is expected to cut the average number of employee absence days from 17 per employee per year to 10 days.

"We can afford this three-year deal because of the new absence policy, which we estimate will save British Airways 30 million pounds a year," Street said in a statement. Last year's strikes cost the airline some 40 million pounds.

FMI: www.britishairways.com