Flight Crew salaries have been benchmarked against other airlines - or in blunt English, they get the going rate. Cabin Crew are being paid, on average, twice that of their nearest competitor.
Clearly, if this is true then it doesn't take a rocket scientist to work out that the position is not sustainable. I have been pretty critical of BA management already but as it appears they are stuck with an archaic CC remuneration structure it does highlight the problem they have.
If all the other operational variables are effectivley the sameas their competitor airlines ( A/C lease/finance, fuel, maintenance, catering , etc . etc.) but CC costs are so much higher then their margin per flight or per seat is going to be eroded.
Based on nuigini's figures
BA:£805 + £2295 + £7920 = £11020 (per flight!).
Next nearest competitor: £405 + 1650 + 4000= £6055 ( per flight)( rounded up)
Based on a BA 744 with say 291 seats this equates to a difference per flight of around £17 per seat or £4964 total.
This may look like a significant difference but its actually quite manageable -provided load factors can be maintained. The problem at the moment is that premium demand is low and so the profitable (more profitable) traffic is relatively light. In the good times simply having two extra business class seats occupied might make the difference. BA would argue that as a premium airline it is more likley that their premium pax numbers will be higher than their next nearest competitor.
By all accounts the credit crunch is hitting every airline so BA is not alone in it's premium pax shortage. However, something will have to give and I cannot see how BA intend to keep operating with CC T&C that do not properly refect market conditions.
GM today have announced bankruptcy measures in the US. Nothing to do with aviation except GM is a lumbering giant whose heyday was in the 60s and 70s who simply lost track of what people wanted. Moreover, what has really hit them, brought into sharp focus by the world recession, is the unrealsitic remuneration package ( healthcare benefits etc. ) that the employees have become used to.
Unless you can get a hold on these problems really early it can become a downward spiral. Staff cannot find alternative employment on similar T&C and become increasingly reluctant to compromise on the " I' m alright Jack" principle and rely on militant TU support to defend a renegotaition of T&C.
One would hope this isn't the position at BA.
( Tightslot - before you delete this posting or close the thread I have posted this as an objective view NOT as some anti BA rant!)