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BA announces more cuts


Tuesday July 7, 2009 British Airways plans to cut summer and winter capacity by an additional 1%, ground six additional aircraft next year and defer its A380 deliveries, while some 2,000 employees represented by Unite have "overwhelmingly rejected" the airline's proposed job cuts ahead of Wednesday's talks mediated by the UK Advisory, Conciliation and Arbitration Service, ATWOnline reports.
In an investor update released last Friday, BA said April-October capacity will be reduced 3.5% year-over-year instead of 2.5% and winter capacity will fall 5% rather than 4% "in response to challenging economic conditions." Its remaining three mainline 757s and three additional 747-400s will be removed from the fleet in summer and winter 2010, respectively. Delivery of its first six A380s will be postponed by an average of five months (the first still is scheduled to arrive in 2012), with the remaining six pushed back by an average of two years. The final aircraft now is due in 2016.
As a result, forecast capital expenditure for the fiscal year ending March 31, 2010, will drop by 20% to £580 million ($947 million) "and is likely to remain at that level in 2010-11," BA said.
CEO Willie Walsh told ATWOnline last week that he "could make a case to take [the A380s] earlier than scheduled," but that costs would "almost certainly rule out changing the delivery schedule".
BA management's request for employee concessions, which includes a reduction of approximately 3,700 fulltime-equivalent positions this year, yesterday met with stiff opposition from cabin crew and other workers represented by Unite. Pilots represented by the British Airline Pilots Assn. proposed their own £26 million package last month, while 6,940 employees agreed to unpaid work or leave that will save BA about £10 million.
Following a meeting yesterday in Middlesex, a Unite spokesperson told The Times that employees "overwhelmingly rejected the company's plan, and there was overwhelming support for the union's alternative proposal," which involves two-year pay freezes designed to save BA up to £130 million and some voluntary redundancies. BA said that some 2,000 of its proposed 3,700 cuts would come from cabin staff. Unite said it was not threatening to strike ahead of Wednesday's meeting but warned that if talks break down it could ballot members on industrial action.
BA flew 9.93 billion RPKs in June, a 3.8% drop year-over-year. Capacity was down 1.7% to 12.47 billion ASKs and load factor slipped 1.8 points to 79.6%.

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