Page last updated at 13:09 GMT, Wednesday, 16 December 2009

What's at stake at British Airways?

BA worker arrives at meeting in Sandown
Cabin crew say they want to be treated with dignity and respect

As up to one million people prepare for possible disruptions to their Christmas travel plans, British Airways and the union Unite appear to be stuck in a deadlock.

The airline and the union have been unable to agree terms over proposed changes to the pay and working conditions of cabin crew, although they have agreed to hold talks.

BA cabin crew are still set to stage their first walkout in over a decade.

We take a look at why neither side is willing to back down.

FUTURE PROFITS

The airline industry has been hit by falling passenger numbers during the global recession, but BA has been hit particularly hard.

Traditionally, the airline has made most of its money from business class passengers, but more and more people are now looking for low-cost fares.

During the six months to September 2009, the company suffered a £292m ($485m) loss - the worst first-half loss in its history. It expects revenue to be £1bn lower this year.

BA profits

BA says it must make substantial cost savings in order for it to stay profitable, and has outlined plans to cut 4,900 jobs by March 2010.

Chief executive Willie Walsh has said these changes are crucial to the company's survival.

"We will not be reversing our changes to onboard crew numbers," he said.

Mr Walsh agreed to work for nothing in the month of July, joining some 800 workers who volunteered to do the same.

Another 4,000 employees took unpaid leave, while 1,400 people volunteered to work part-time, in a move which the airline said would save £10m.

If the 12-day strike goes ahead, it will ground hundreds of flights and cost BA between £20m and £30m a day, analysts say, on top of its current losses of around £1.5m a day.

PROTECTING JOBS, PAY & WORKING CONDITIONS

In November, BA reduced the number of cabin crew on long haul flights from 15 to 14 and introduced a two-year pay freeze.

Unite officials address the media

It says its cabin crew are among the best-paid in the industry with average pay for a crew member of about £29,900 a year, including bonuses and allowances. That compares with just £14,400 at Virgin Atlantic.

The airline has also proposed new contracts for fresh recruits and newly-promoted staff, but Unite says this would lead to a two-tier workforce.

Unite assistant general secretary Len McCluskey says staff want to be treated with "dignity and respect".

Andy Cook, chief executive of the employee relations consultancy Marshall-James, says the relationship between management and workers must be pretty poor.

"It's really unusual for a strike ballot to have such a high turnout (80%) and a high vote in favour," he says. "To me, that's a protest against management, that's not just about changes to proposed pay and changes to conditions.

"There's probably some kind of disconnect between management and staff, and the union is probably making the most of that disconnect. The management has got to do something."

POWER STRUGGLE?

"This union traditionally at Heathrow has been very strong," says Mr Cook, who was head of human resources at Gate Gourmet when it was involved in airport strikes in 2005.

The catering company sacked 670 workers in a row over restructuring, leading to BA ground staff at Heathrow then walking out in sympathy, crippling airport operations.

"I would imagine there's a lot of jostling for position and a power struggle going on," he says.

BA needs to be able to have the power to make changes it feels are necessary, he says, while the union wants to make sure its members are seeing the value of paying their membership fees.

With both sides unwilling to give way, it is difficult to say what the outcome will be.

"I think either at the last minute they will reach some kind of agreement, whether through Acas or some other third party, or management will say, 'Fine, go ahead with the strike'. If it goes ahead, the airline will change forever," says Mr Cook.

"The union is using it as a political battle and pushing for a government intervention [like Royal Mail]," he adds. "With Royal Mail, the union thought the government would step in and save it - it didn't."

PUBLIC OPINION

Ultimately, public opinion may play a role in influencing the dispute.

Barry Harrison and family: BA Christmas strike threat
I am very annoyed but I hope BA don't give in to the cabin crew
Barry Harrison, Liverpool

"I hope public opinion has quite an influence because it's important," says Andy Cook. "I think the union are using their industrial muscle in an unfair way."

Some analysts have been surprised at the length of the industrial action called by Unite.

"It strikes me as a bit of a collective death wish reminiscent of the 1970s," says Murray Steele, airline specialist from Cranfield School of Management.

Members of the public who have got in touch with the BBC have expressed little sympathy with BA staff.

"I don't blame BA for trying to stay in the game against the likes of Virgin. I do blame the vicious cynicism of the cabin crew," said Aoin Douglas, of Liverpool.

Barry Harrison, from Liverpool, whose family holiday is likely to be disrupted, said: "I am very annoyed but I hope BA don't give in to the cabin crew."

Both BA and the union would like the support of the public, but regardless of which side people believe has the stronger case, the longer the dispute goes on, the more likely it is to alienate customers.

"I think if the strike goes ahead, the BA brand will not be forgiven for a decade," says Simon Middleton, a former BA customer service consultant.

"This could, quite literally, kill the brand and ultimately the company. It's little short of tragic.

"If Unite really wants to protect its members then I believe it should be working with the brand, not against it."



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