The company can afford RPI. All that Barrons e-mail states is that profits won't be as large as he'd like.
Given that NATS makes most of it's profit in the Summer and the recession was considerate enough to wait until October before it kicked in it's pretty likely that NATS will make some profit in this financial year. Anybody who thinks that means that there is no problem is deluding themselves. NERL income over the last two months was down 8%. Schedules will be similar through to Easter so that seems a pretty good estimate of income till then. Summer schedules are the big unknown but does anybody honestly believe that Land Rover, Honda, Woolworths and Zavvi employees are rushing out to book their fortnight in the sun ? If income is down 8% you then have to add in the RPI-x element, the annual increments that mean that NATS staff costs rise year on year regardless of pay settlements, the likelihood that pension costs will increase (the settlement was only about limiting the cost not reducing it) and very quickly the profit margin is reduced and the company is making a loss.
I don't want to hear "welcome to the real world" either.
Unfortunately not living in the real world is a privilege only open to Government, companies owned by generous benefactors (think Football clubs), Banks (a surprising new addition to the list) and companies which have reserves built up over many years. Everybody else including NATS can only trade at a loss for a very short time and PB and the other Directors are legally obliged to ensure that it doesn't. If income falls there are only two choices reduce costs or put up prices. Even if the Regulator were prepared to do the latter does anybody really think that would work ? When your customers are struggling raising charges will do nothing except reduce demand and make the problem worse. Reducing costs is the only option but however much you think might be wasted on reward ceremonies and management initiatives there is no way you are going to save the sort of sums involved without cutting jobs.
I just hope and pray our union bods have got their act together and don't bend over again to bail out PB and co.
I also hope they've got their act together but I suspect we have different views on what that means. My expectation of a union is that it represents all its members and gives the weaker members some power derived from the more powerful. I hope that for any union protecting jobs comes top of the lists of the things it does, protecting income is also important but not as important. I don't expect a union to favour improving the lot of its more powerful better off members at the expense of its weaker ones.
I'm all for cutting jobs within NATS, if it is done properly; i.e. wasters get chopped.
A very dangerous strategy and one only advocated by those arrogant enough to believe that they aren't likely to get chopped. The problem is none of us know how long we will be fit and able to perform as well as we do today and one day, when it happens again, you may find yourself in one of those posts that somebody thinks isn't important. When that time comes you'll have to hope that your colleagues don't take the same view as you are now. The only safe strategy is to fight for every post whoever fills it and whatever you may think about their abilities. I hope that is what the union will do.