Airline Looking To Cut Costs

Saying the company is in a "fight for survival", British Airways Chief Executive Willie Walsh has said he will seek across-the-board pay cuts from employees, including pilots. Management planned meetings this week with BALPA, the union which represents BA's pilots.

As we've heard so often, the recession is to blame for the situation. BA posted a $638 million year-to-date loss in March, after seeing record profits last year. The company has scrapped a planned dividend, and Walsh and Finance Director Kieth Williams will forego their salaries in July, according to the Times of London.

Pilots will be asked to take a voluntary pay cut in discussions with the union this week. Pilots are likely to be asked to vote on a range of cost-saving measures, including an across-the-board pay cut described as "small", industry sources said. The union, which has held talks with BA ahead of the meeting, says it hopes to have a package in place by the end of this month.

According to the Times, the main sticking point is Walsh’s desire to implement permanent reductions in pay and conditions. Some staff say they will only make temporary concessions to help in the current crisis.

But resolving issues with labor is not the only problem face by BA. The airline is also facing an enormous pension deficits, estimated to be as high as $4.7 billion. A BA spokesman said following the labor meetings, "We expect then to discuss with the (pension) trustees how the schemes should be funded in the light of the valuation findings. We will explore all options as part of a funding review."

FMI www.ba.com