Pilots tell City to ditch BA top brass
From The Sunday Times
April 6, 2008
Pilots tell City to ditch BA top brass
Dominic O’Connell
BRITISH AIRWAYS’ 3,000 pilots will this week launch a scathing attack on Willie Walsh, the airline’s chief executive, accusing him of “arrogance” and urging top shareholders to force a change in management in the wake of the Terminal Five fiasco.
The harsh criticisms are expected to come in a letter this week to big City institutions, the CBI and senior ministers.
“Banks, institutional investors and analysts need to wake up to the fact that there is something very wrong right at the heart of this company that is making our great brand a laughing stock . . . we want confidence in our leadership, not arrogance,” the letter, from Jim McAuslan, general secretary of the British Airline Pilots’ Association (Balpa), says.
The union is embroiled in a bitter industrial dispute with BA, which could lead to the first strike by flight crew in three decades.
The Balpa attack caps a dismal 10 days for the airline after the disastrous opening of Terminal Five at Heathrow on March 27. The airline had promised the £4.3 billion facility would transform passengers’ experience at the airport. It quickly turned into a debacle, with flights cancelled and thousands of bags misplaced.
This weekend a senior aviation industry executive close to the chaos laid the blame squarely at the feet of BA management. The executive – who asked not to be named – said the airline “took a chance” by training an insufficient number of baggage handlers.
“They were saving money and hoping it would be all right on the night. It is a great facility and they have screwed up the opening by trying to cut costs,” the executive said. Another senior source said the airline had discarded operational readiness plans laid out months in advance.
Walsh has accepted responsibility for the problems and apologised. This weekend he used the airline’s staff newspaper to repeat the apology. “We got things wrong and I’m sorry,” he said. “If you want to blame someone, blame me.”
He accepted the BA strategy had involved risks, but “none of these were enough to stop us moving into the new terminal or to stop day one being a success”.
He said some of the facilities for BA staff provided by BAA, Heathrow’s owner, were “not as good as they should have been”.
“I have personally told the BAA chief executive that they need to improve staff areas and help get the terminal into proper shape,” he said.
City institutions, BA’s biggest shareholders, have so far refused to condemn Walsh. Despite the poor performance of BA’s shares, down to 235p on Friday from a 12-month high of 519p, they cite his resolution of the company’s pension-deficit crisis and improvement of margins.
McAuslan claimed, however, that the pension resolution was a “team effort” aided by “pilot ingenuity”. “The margins may look good, but the financial establishment preoccupation with the bottom line has glossed over the warning signs.”
Pilots have voted for a strike over BA’s plans to set up an “airline within an airline” to fly from continental cities to America. BA has blocked the action by threatening to sue the union for restraint of trade. A court hearing begins on May 19.
McAuslan said the airline was also seeking damages from the union for damaging its brand.
“Given the shambles at Terminal Five, that is comical,” he said.
Meanwhile BA staff may pay for the debacle. Employees will qualify for a bonus of two weeks’ pay - £1,000 for the average employee - if the airline hits an operating margin of 10% for the financial year just ended. Last week BA estimated the cost of the T5 problems at £16m, part of which will fall into the relevant period. Analysts think BA will now just miss the 10% target. Annual results are out on May 16.