BA's profits are extraordinary in the light of an industry in absolute meltdown across the pond. UA, Delta, NW, Continental, AA, US Air: all teetering on the edge.
Their is a systemmic fault in the deregulated airline business - there is no rational pricing model, perhaps abetted by the relatively low barriers to entry.
BA will, however, soon face, along with the rest of the industry a new crisis. Either Iran will be attacked to stem its nuclear ambitions, or North Korea will require military intervention for the same reason, or bird flu will jump the species barrier in the Far East, or................ the list is endless. When it hits, revenue streams will collapse, and this time all the buffers gained by selling assets are gone - we've already sold them all.
Cost cutting at BA will have to be on a scale not seen before, as it is at all US airlines. Forget your pension, forget pay rises ever again, look for pay freezes, outright cuts for flightcrew, massive cuts in back-office numbers, wholesale outsourcing of functions like engineering, ramp, baggage services. I suspect that "off-shoring" of expensive functions like flight crew and cabin services will be required too. Latvian pilots and Polish CC on a three weeks on, one off basis with free positioning tickets and barrack housing provided by BA for their spell in UK - wages at triple the East European norm and one quarter of ours? Why not?
Being an airline employee is going to be like being a soldier in a new kind of economic war, one that you just cant win.
We are all going to have to accept that we have made a very bad career choice - just how does a pilot "work on into retirement" in our brave new age of no final salary pensions and investments that do not grow. You HAVE to retire at 60. Just what skills can he or she offer an employer apart from flying - very skilled but very specialised.
And like any war there will be and are casualties. The A320 P1 who fainted at check-in the other day, the rising toll of Long Term Sick, the marriages going under, the likely need for all SH to fly 900 hours a year "the BA way" - i.e. fixed-links, CAT turn-arounds, FTL limit duty days, multiple earlies off another min rest nightstop, etc etc.
But N.B. even that will not be enough - profitability on a scale big enough to justify the investment in the industry will remain elusive. BA will not be around in anything like its current form in three years, let alone ten. The FSS will be closed to existing entrants, very little direct employment will remain and that which does will be on T's and C's that will make, for P2 pilots at any rate, being a London tube driver look an attractive option.
Those outside BA know how hard it is, but my gues is that it will be getting a lot worse all round. Anyone care to confirm the rumour that 17 British Midland co-pilots from the A320 fleet have resigned this year?
There are sectors of the economy making money. Banks, oil companies, some sectors of the leisure industry. Get out, get a middle management job with one of these areas, go home at night and be there when your kids grow up, even if its just at brekfast and at the weekend, (you wont be doing that on LHR Shorthaul A320, thats for sure).
Wannabes beware - you are entering an industry where you will have huge practical and legal and moral responsabilities, but no chance of an equity stake worth having in your firm, no chance of "moving across" at the same seniority level to a different employer, no transferable skill outside flying, no Final Salary Pension to retire onto, and a mandatory retirement age of 60, at which, if you make it, you will be knackered. Equally, you will be loathed by your employer as a burdensome expense and treated with contempt as often as not.
BA's profits are all well and good, but it is not enough, and short of radical change in the industry, it never will be.
Last edited by ShortfinalFred; 19th May 2005 at 09:58.