BigBrutha - PwC - is that who Balpa listened to then for all of that excellent advice?

CFC - PWC are accountants, not lawyers, but then as you don't wish to know about BAs financial situation I would't expect you to understand that. Lawyers are the people who'll be getting the high court injunction to stop you striking.

As an interesting aside to todays claims that BA didn't turn up at the meetings, it's hardly a surprise. BA announced negotiations were at an end last night and the union representatives should stand down until they were contacted by ACAS regarding the next step. They didn't even book a room at the venue as no negotiations were scheduled today. Makes you wonder why the union reps turned up with TV crews when they'd been told the night before that there was no meeting.

90 days notice
 

It has been mentioned/rumoured that the 90 day notice letters have been posted.

If you were WW what date would you post the notice.

ASAP - as the company needs to make savings and reduce cash outflow quickly.

31st July - 90 days later is the end of the summer schedule and the start of the winter schedule, when flights are greatly reduced.

30th September - a nasty date as 90 days later is christmas.




Runway Vacated


Sounds like that may feature in BASSA's epitaph :eek:

From Walsh, june 23rd.

We started this year with £1.4 billion in cash and told the market that we aimed to finish the year with £1 billion.

Now, I never said we didn't face a problem, but what I find astonishing is that just after the CEO states the situation is so desperate that he needs staff to work for no payment, he then releases an email with the above quote. Why the hell would anyone work for free when the company is sat on such reserves.

One way to preserve the cash balance is to protect the dwindling forward bookings which are available. Instead Walsh scares custom away, then, and I'm certain this is now the case, engineers industrial action. We are losing £3million a day. Thanks to Walsh that figure will rise. Walsh needs to convince unite that a compromise exists and restore customer confidence. So far his method has only worsened a bad situation.

I think I'm correct in saying that a substantial amount of that 1 Billion cash is actually passenger ticket money that has been paid in advance. Once BA's reserves fall below a certain value, the travel agencies/credit card companies stop forwarding us the cash until the passenger has flown ( just in case BA go bust in the mean time). This is at about the same time that the oil companies start asking for cash up front rather than payment a month in arrears (in case BA go bust again).
Obviously BA want to keep the precise amount at which our creditors lose confidence in us very close to its chest, but it doesn't take a rocket scientist (or a BASSA rep) to realise it could be around December time at our present cash flows.
One only has to take a look at BA's monthly fuel bill to see that if we have to pay for fuel up front, we are finished as a business.
My guess is we are paying at least 100 million a month for fuel. 6 months of that reduces our 1.4 billion "cash" to 800 million and takes us to December. Then BA's losses really kick in for the winter.
All this is obvious stuff. Hopefully, the rocket scientist BASSA reps have drawn up a new business plan for BA as well as a new industrial agreement and we will all be able to go back to how things were.

Last year's fuel bill was £3billion so the maths is quite simple - last year BA paid £250million a month in fuel alone. That was up £1billion on the previous year, or £166.67 million a month. So it's probably in the region of £200million a month so that Dec estimate is out by quite a large margin. The real date is probably closer to Sep hence this needs sorting ASAP.

At the risk of being picky, I gather that we have hedged at lower prices than last year, so our fuel bill this year should be less than the 3 Billion last year. However, I agree with the sentiment that the company has to get a firm grip on its costs fast.
One could argue that the unions that settled first have played a blinder as it is difficult for the company to come back with modified demands, however, those unions that haven't signed are now having to deal with moving goalposts.
That's not to say that the company wont come back with the begging bowl in October.

I believe the real crunch will come when the pension acturies release their scheme shortfall numbers. Yes all the potential savings which BA is hoping to achieve from salary sacrifice and changed working conditions will help, but they pale into insignificance when pension liabilities of circa 3 billion are published. The sums which BA paid into the schemes last year easily accounted for the 400 million posted loss.
What I believe we are seeing here is a fundimentially sound company IF it could just divest itself of these huge pension liabilities.
I just do not think the UK wants BA, the national carrier, to fail so maybe the government should take these liabilities onto its books? The sum involved is tiny compared to the Billions that have been spent on supporting the UK banks. In exchange BA could give the government shares as collateral.

What do you base that on? Who do you mean by "the UK"? And the government has mired itself (sorry, the next 2 generations of taxpayers) in such huge debt that there will be no handouts for BA. Forget it! BA is not considered a 'heartland' for Labour voters!

Thanks PC767 post removed & apology accepted.

Best Wishes Strimmer

Has PC767 been naughty ..... again? :)

Most likely!:)

I am intrigued as to what the BASSA negotiators have actually been doing for the last few months?

IMHO the fruits of their ceaseless toil appears to be cherry picking the best bits of other departments agreements and cobbling them together.

Walnut #72
 

"What I believe we are seeing here is a fundimentially sound company IF it could just divest itself of these huge pension liabilities...so maybe the government should take these liabilities onto its books? The sum involved is tiny compared to the Billions that have been spent on supporting the UK banks."

Two problems with your logic here. Firstly, if the government does this for BA, then it's hard to see how they can refuse to do it for every other underfunded defined benefit pension scheme. The total deficit of all such schemes is around £250-300 billion right now. Secondly, the government already has about £750 billion in unfunded pension scheme liabilities of its own employees (civil servants, NHS workers etc). It's likely that the government will want to cap these in future, ie stop public sector defined benefit pension schemes. I suspect keeping this quiet until after the election is one reason the comprehensive spending review has been shelved until post-election. Anyway, there's no chance of the government taking on additional private sector pension liabilities. The UK would lose its AAA rating within days if the government adopted this approach. Keeping it is more valuable than a few thousand BA staff, I'm afraid, painful though that may be to hear.

BA has got itself into a pension mess which sees its pension schemes valued at approximately 8x that of the company itself, with a deficit equal to 5-6 years of "normal" pre-tax profits. It's BA's problem to get out of it. As pensions are simply deferred income, one way of mitigating the pension problem is to cap, or even reduce, current salary levels and staff numbers entitled to such pensions, thereby also reducing projected pensions payable in future.

Incidentally, the deficit numbers may not be as bad as you think. If long term interest rates rise, and they have been doing in recent weeks, that actually decreases the present value of pension liabilities. As asset values have risen since March, when they hit 10-12 year lows, the pension schemes will have had a double benefit over the last three months. There will still be a (big) deficit, but might not be at the £3 billion level.

I'm also intrigued as to what BA negotiators have been doing for the last few months.

PC767: Going along to meetings that BASSA failed to turn up to? Negotiating agreements with all other departments?

Some incredible dissection of numbers and figures guys!
My Doris is a LH purser at LHR and I really wish she could keep earning c£30k a year before she can tell them to stick it. The sad fact is that nowhere else in the industry do CC enjoy either the terms, conditions and salaries that you currently enjoy. I know you have fought long and hard for them but the fact is they are way way above the industry standard and norm. Thats the hard to digest truth.
Vote to strike over this and you are putting a noose around your own neck if not the companies future...its hard to take but more than likely a fair assessment.
Good luck!

Overstress.

Have I missed something? Has every department finalised a deal?

KUMOOZ, You appear to be in a position to lose Doris's money, or at least your willingness to surrender the money makes it appear so. I am not unfortunately. The problem is BA are supplying the noose.

Use Your Head
 

All I Have To Say Is Please Wake Up, And Do Not Lose Your Fantastic Jobs X

Now I get it!
 

The idea that the increases in costs to be saved from the IFCE budget are due to delays in reaching an agreement doesn't quite add up.

2 months ago the original ask was to save £82m from IFCE budget (£568m) which was about 14%

At the same point Flight Ops had a target of saving £13m from their budget (£445) which was 2.9%

Both those targets have been increased. Now Flight Ops is to cut £38.5m which is 8.6% and IFCE £210m which is 37%.

There seems to have been a similar rate of increase applied to the 2 departments.

I am actually a little relieved by this...not because of some inapproriate and foolish notion about fairness....but because I was concerned that the whole intention of the LT was to force us to fail. After all, every time BASSA reached their asking figure, they increased it. Seemed strange, but perhaps that is the way business is done.

As for the accusation that our negotiaition has failed because of inadequate effort or unethical bias in the part of the BASSA reps...I disagree. The simple fact that they had to negotiate a cut 4 times the size of the BALPA negotiations is sufficient explanation for me. The larger the cut, the more difficult the task.

Anyway, now I have read the threads on this topic (took a while, but luckily I almost never go to work - I'm BA cc and we sit around wondering what luxury to buy with our inflated wages that might fill some of our excessive time off). I feel I have a much better understanding of the whole situation. As the FO said to me, the other week...I'm sick of being such a terrible burden to WW and I'm going to send him an immediate apology!;)

I shall now do likewise. Thank you for putting me right.