Message from our manager
Dear Colleague
Many of you will have read this weekend’s communication from BASSA/Unite.
Ahead of our meeting with them and Amicus on Monday, I wanted to give you a picture of where we are and how things have moved on.
I need to tell you that the challenges we face have got much worse since the start of these pay and productivity talks with the unions several months ago, and are now far more serious than any of us could have imagined.
Grim reading
As you know we made a record pre-tax loss of £401million in 2008/09 – with the results in the fourth quarter making really grim reading. Underlying revenue, excluding currency exchange, was down 21%, and the operating loss for the quarter was £309 million – the largest quarterly loss in our history.
We’ve started the new financial year with every one of our key measures down – how much customers pay, how many customers we have, and how full our planes are.
Fight for survival
Let’s be clear – we are now fighting for our survival and time is running out.
As a result, the company has set a deadline of 30 June (four weeks away) for every area of the business to reach agreements in the pay and productivity talks.
At the same time the size and scale of our challenge on permanent cost-savings has substantially increased across the company and in IFCE.
It means the measures we have been discussing with the trade unions until now, including the introduction of a Mixed Fleet at Heathrow, are no longer enough.
For example, the cuts in our winter schedule and grounding of 16 aircraft have significantly reduced the planned savings Mixed Fleet would generate.
A separate Mixed Fleet still forms an important part of our plan, but it will launch on a much smaller scale than originally forecast: 500 crew in the first two years instead of 2,000.
Increased productivity
Instead we have to look harder at increased productivity with our existing people to generate the savings we need.
That is why at Monday’s NSP, we’ll be talking not just about Mixed Fleet Heathrow, but also significant reductions in crew complements, while continuing to deliver excellent service to our customers.
This could be achieved through crew taking up offers of part-time contracts and voluntary redundancy, and while it does mean having to work harder, it adheres to my commitment of trying to minimise any financial impact on you, our current crew.
Voluntary redundancy
We’ll offer everyone the opportunity to express an interest in voluntary redundancy and we’ll open up the lists next week. We’ve already started the process of offering part-time contracts to eligible crew using the Ops and Choice Framework and the existing lists.
At Monday’s meeting we’ll also discuss a new disruption agreement that allows us to respond more quickly to operational disruption, enabling us to improve the level and speed of service we can offer to our customers.
Temporary measures not enough
We’ll also accept the offer from Steve Turner, Unite’s National Secretary for Aviation, of a two-year pay-freeze and an increment freeze, although we’ll say that in its present form as a ‘temporary loan’ the offer does not go far enough.
I know there are some tough messages in this letter, but I have to underline the gravity of our situation and the need to deliver permanent cost-savings. Temporary changes, though welcome, are not enough, and if we don’t face up to this issue we will go out of business. This will affect you, your pay and your pension.
I remain committed to talking with the trade unions to find a joint solution to the extremely serious challenges we face. I will contact you again after the NSP on Monday.