BMI redundancies/in intensive care
From The Times
January 31, 2009
Threat of job losses hangs over bmi as airline reneges on pay rise promise
David Robertson
Bmi, the UK’s second-largest airline, has broken a promise to 5,000 staff that it would honour a pay increase this year and has also warned of possible redundancies.
Nigel Turner, the chief executive, promised only two months ago that the pay deal, which was agreed in 2006, would be honoured despite the downturn in the aviation sector. Staff were due to get an increase of inflation plus 0.5 per cent.
However, in a letter to staff this week, Mr Turner said: “I regret to say that although I had earlier indicated that the agreed pay award for 2009 would be implemented, it is now the wisest and most sensible decision not to pay this award and impose a pay freeze for the current year.” He added: “Freezing pay enables us to limit to the minimum those we may need to make redundant.”
Union leaders are understood to have met bmi employees last night to discuss Mr Turner’s letter and could call industrial action.
Related Links
* Virgin Atlantic in BMI talks with Lufthansa
* Bmi to end Manchester-Chicago services
A bmi pilot said: “This combination of events has led for a call of industrial action as the notice received also finished with suggestions of redundancies in the near future.”
Staff are understood to be furious that bmi delayed this month’s pay cheques to remove the pay increase. This is understood to have left some staff short of cash and unable to pay their mortgages.
Mr Turner said last November that bmi would be “in intensive care for some considerable time”. He added this week that results would be the “poorest in recent times”.
Bmi had planned to freeze pay from 2010 but bringing forward that action by a year will enable it to save about £7 million.
Lufthansa, the German flag carrier, is buying the airline. Sir Michael Bishop, the chairman, sold his 50 per cent stake to Lufthansa last year for £380 million, giving the German carrier a total holding of 80 per cent. The deal is expected to be completed in March.
Mr Turner said in his letter to staff that Lufthansa had demanded management take all necessary steps to ensure the recovery of bmi.