WW's "leadership team", (and I put that term in quotes advisedly), talk to people in the airline every day. One of them has let slip that WW is particularly keen to enable access for contract pilots to the flying that the BA brand sells. He does not want the current situation of being tied to a sole source, the pilot employees on a BA contract, to continue unchanged. He HAS, seen how Ry@nair use contractors to scr@ew the employees of Ry@nair and he is said to thoroughly approve of the technique.
Can he close "exisiting" BA? Theoretically no because the size of the pension deficit, which he would have to make good on closure, dwarfs BA's reserves of cash to pay it.
Could he close "existing" BA after a rights issue had left him with enough cash to pay off the existing scheme liabilities? Lets say if a strike was called that shut BA down for a prolonged period? Yes, he could. It would not be a case of "re-employing sacked workers", it would be a case of a wholly new legal entity coming to the market place for employees in the aftermath of such an event. The rights issue money would be used to recapitalise the new operation and most probably be issued to the investors as shares in the "new" operation.
Will the City tolerate this loss of revenue whilst the dust settles? My GUESS is that they will, for, as they see it, the prize of a BA with NO future pension liabilities is well worth having. Like a supermarket, a profitable airline is hugely cash generative, and they know it.
Interestingly, the current pension proposals as they relate to pilots amount to a virtual scheme closure anyway if you have done less than about 15 years in BA. In the face of this, pilots have almost nothing to lose by going on strike and my guess is that they will if this proposal stays unchanged.
I know this will delight some readers here who eagerly await the jobs they assume will flow from all of this. The problem is that should BA get away with the current pension proposal our costs will be such that many of your levels of recompense will come under very close scrutiny - you can picture the scene, an accountants' office somewhere, a beady-eyed observer sees BA an A320 pilots doing 900 hours a year in shorthaul, short stage length flying with no pension rights and a salary less than Ry@nair offer SOME of their pilots will say: "right, we are going to have to cut our wages too".
Indeed, this is EXACTLY what WW and his advisors WANT, a "virtuous cycle" of wage cuts as each operator seeks to race to the bottom first. In that scenario, he wins every which way.
This may well be capitalism at its finest, but I dont see dentists meekly agreeing to a government contract that scr@ews them over, or GP's working for a pittance these days. Flying remains a position of vast public trust and I guess we all, have our own "bottom line". Mine is my pension - I have not enough time to make good the cuts BA are proposing such that I face flying into early old age (65) to retire on a pittance. I suspect BA know that a lot of people will either fail a medical or a sim before 65, so "saving" them even more. In the sim failure case they will ultimately boot you out early and apply an actuarial reduction to your piddling pension for "early retirement".
In the face of this I have nothing to lose by striking and everything to gain. There is a growing awareness that bulgeing airliner order books generate a need for pilots that an insurance company will underwrite. Either a better job elsewhere will come from this, or it'll be time to leave the "industry", no bad thing perhaps when we have sunk to the level of trying to compete with a carrier who charge a disabled man £15 for a wheelchair to reach the terminal.(Hello again, Ry@nair).
I've long maintained that anyone who can crack an ATPL, conversion to a jet, MCC etc etc has plenty of talent that could be used in many fields, most more positive than this one. Its a sad reflection, given that one of the pleasures of the job has been the quality of people I've flown with over the years.
In summary, I think we will see a strike the like of which the airline industry has not seen for years. I think existing BA is doomed to fail as these proposals will be rejected by all the staff groups. The city will accept a radical solution. There will be an attempt to contractorise BA flight crew. Ultimately, I think experienced pilots will be the winners. The supply is not infinite and the demand for experienced, type-rated people is rising long term. There may be bumps in the road (Iran war anyone?) but the trend is upwards.
Last edited by ShortfinalFred; 12th Apr 2006 at 16:26.