PPRuNe Forums - View Single Post - British Airways - CC Industrial Relations & Negotiations
Old 29th Oct 2009, 09:43
  #2327 (permalink)  
Carnage Matey!
 
Join Date: Apr 1999
Location: UK
Posts: 1,691
Likes: 0
Received 0 Likes on 0 Posts
Bealine - most of the reading matter in your list predates the collapse of Lehmans and the subsequent economic downturn. Only the report on the supply of airport services in the UK and the report on understanding airport passenger experience were published this year, neither of which seem to bear any major relevance to the running of an airline.

The recession may be a convenient way to drive hard bargains if you're buying a car, it's not if you're buying a billion pounds worth of aircraft. Interest rates are punitive for that sort of cash - if you can find someone to lend it to you. Most can't as the banks are still hoarding cash to shore up their liquidity. Remember what I said about Private Equity? The days of cheap cash are gone. Have you noticed the Bank of England talking about negative interest rates to force banks to lend money? Have you noticed all those rights issues that are taking place at the moment? They're taking place because these big blue chip companies can't raise money from the banks. BA are committed to taking on a load of new 777s this year that they don't want simply because if they don't the financing deal arranged pre-downturn will lapse and they can't get a new one. Cathay had to pay for two 777s this year in cash because they couldn't get finance. One of the major problems in this downturn is the absolute, steadfast, head-in-sand refusal of BA's staff to recognise there is a problem. They're trying to apply High Street finance ideas to big business ("Interest rates are low, cash must be cheap"; "BA have a billion pounds in the bank, they're loaded") and they do not apply. The aviation industry probably isn't suffering a permanent downturn, but nobody has any idea how long the temporary downturn is going to last, and many BA employees don't seem to understand that BA have no god given right to BA exist in the industry. Think about what happened to Pan Am.
Carnage Matey! is offline