Walsh does not want to destroy the company, intending to restart it with no liabilities. Clever though that might seem, it would be not only logistically impossible, but unfinancable, an illegal destruction of current shareholder value (what is left of it), and impractical from the AOC / slot aspect (which is the only value that BA has remaining).

BA is failing - despite many great people - as there remain too many hangers-on, and too many unwilling to enhance customer service.

It is not a question of what is negotiated, but a matter of providing the best customer service in the face of all competition out there, at the most economical price.

Sadly, that is lacking, and despite the efforts of many, the company may fail due to those few.

It seems wildly optimistic to suggest that as the economy will rebound (eventually it will), that BA will return to profitability to be shared in by all.

- (a) the return on capital belongs to the shareholders who put up risk capital, not to the employees who operate in a job market and risk no capital in doing their job
- (b) many good companies have been outrun by recessions
- (c) it does not solve the question of complexity to contracts, requiring more than the average number of accountants, bookkeepers and operations staff to support the patchwork of agreements
- (d) the competition is not standing still


I just wish to ram this one point down the throat of some posters on this thread. Unionism is not socialism. It is not protecting jobs in the economy, it does not raise pay across the economy and it does not help those most needy in society. These people remain shut out due to elimination of opportunity (2 new-contract staff could be employed in place of one on the eldest BA crew contracts).

Unionism of the type operated by BASSA and the RMT is the politics of special interests. It lowers employment levels by preventing companies from operating at market rates, lowering productivity to the economy and raising costs to the public - particularly in the case of a business that has a strong monopoly-type position over LHR slots.

The company belongs to shareholders, not staff. Staff are intrinsic to its success and should be motivated appropriately. Service should never be dictated though by union agreements, nor do extra "profits" belong to staff, unless the shareholders deem that success to be due to extraordinary effort deserving of bonuses.

The shareholders have little to show for their capital to date in BA as a public company - their returns are below the cost of capital (see FT Alphaville » Blog Archive » Airline cycles, redux)

If you are the best, the market will pay the best rate in the best job, so move elsewhere if that rate is available. If not, you are operating in a commodity market, and should think about getting some new skills.

The above may seem harsh, but this is the reality of a competitive capitalist market economy.

Stall pusher - some of your points...totally misinformed:

Google - DEAD CAT BOUNCE. Going down again already - fundamentals are dire.

re LCY-JFK - funded by Barclays Capital - reasonably well-known to be the case. BA therefore have nothing to lose by going ahead.


If you really want to participate in the upside - risk some money of your own and buy the shares!

I just wanna go back to the "BA get paid double what other airlines do" part of the thread
ive spent the last week talking to many of my friends from various other UK and euopean airlines and its interesting to find out that us "new contract" crew are not on as much as people think. Our basic is actually less than some low cost airlines.
I took a 5.5k drop in basic to leave my last airline as a senior grade to work at BA as a junior grade so im actually coming out with less a month, all be it for a better work life as im not selling everything onboard the aircraft including my soul.
I dont know where the 30k has come from, because looking at my last 2yrs worth of P60s... im far from the 29 or 30k mark.

"old contracts" are slightly different.. as we all know! :}

Channex101,

Do you last two P60's include all the cash the company give you ?

Channex
 

This has come up elsewhere and the trouble is the "average" figure used by the media is often the arithmetic "mean" (e.g. in Cabin Crews case the total CC salaries divided by total CC numbers) which can be skewed upwards by a few very high earners. More meaningful would be the "mode" figure - the most common salary.

There are a great many staff who are large shareholders too and have a vested interest in seeing the company survive. Don't be fooled that the small number of negative opinions on this thread represent the majority - they don't.

Channex101, the average figure that is getting bandied about comes from a data table published by the CAA.

The table is of the AVERAGE EXPENDITURE PER HEAD for the employer to employ the employee. The CAA has published this table annually from at least 1997. So, sadly the data is out there and it shows that the AVERAGE COST TO EMPLOY a cabin crew member at BA is £29900, and at Virgin it is £14400. (In 1997 for instance it was BA £17200, Virgin £12000.)

So your average pay packet will not show £29900. But is does cost BA twice as much to have us as it does Virgin. CSD's and senior pursers on the old contracts will skew those figures, as do all those managers employed to manage us. They don't come free!!

Look at our pilot colleagues, they have about a dozen managers to look after 3500 pilots. We must have hundreds looking after us........oh but we need it dont we 'cos we are touchy feely people?

And look again at the number of pilots who are on standby each day, it must be less than twenty to cover the entire operation. We have loads and loads of us, sitting on standby. That costs us!!

So, lets not strike. Lets let expensive CSD's and Pursers leave, if they wish, with a Voluntary Redundancy package. Lets alter our rules so that we can work a little harder, but more importantly, more efficiently. Lets do it so that we are less likely to require the use of standby's.

If we strike, there will be no Voluntary Redundancies, only Compulsory Redundancies and conditions and salaries imposed legally under "Some Other Substantial Reason" rules.

COME ON BASSA, SURELY YOU CAN NEGOTIATE THAT?

Re-Heat, excellent post!

Just to add, for the benefit of those who still can't see how a major multi-national airline can go bust!

Cash flow is king in this industry, the main reason being that any airline is dependent upon its suppliers for the continued smooth operation of its core business. A minimum amount of cash 'liquidity' is required to enable the company to access short term suppliers credit, eg. 30-45 day payment windows. Loss of liquidity results in either a draw down or a removal of this short term credit facility.

This leads to a loss of faith in the parent company and a requirement to pay 'up front' either by credit transfer or cash for all services. That means, catering, landing fees, ground handling services, hotels, navigation fees, ATC fees, fuel, ground transport etc. etc. etc. the list goes on.

As the company has financial problems already, the requirement to provide up-front cash for these services further exacerbates the problem leading to a major cash flow crisis. The company becomes unable to access competitive loan rates from banks or creditors instead having to rely on 'risk' rates which can be exorbitant! This further leads to loss of confidence by investors. Here we are talking about MAJOR investors, banks, investment companies, pension companies etc. who have millions of shares. If they start to sell then the downward spiral begins. The company's value drops, credit becomes more difficult and bookings dry up totally as consumer faith disappears. Small investors begin to sell before the share price plummets too far.

Eventually the money runs out totally and the company collapses with any material assets going to the receivers to offset investment losses.

Look closely at the last few months of Alitalia before their 'bailout' by Berlusconi.

This scenario is never far away for ANY airline even in the best of times.

Remember 'Civilisation is only ever three meals away from Anarchy.'

In fact, the money doesn't need to run out totally. For a company the size of BA, if the overall reserves reach about £500m, it's game over. This is the "liquidity" that wobble writes about. :eek:

Exactly - once the banking relationships, credit lines, and hedging relationships are terminated due to low liquidity, the decline only accelerates.

And the longer that the Trade Union groups take to come up with suitable agreements, the sooner the accelerating down the decline happens.

imastweardsothere

This is an even bigger problem than most people think. It is a double edged sword consisting of loss of forward booking confidence by the consumer leading to lost revenue and corporate loss of trust in the ability of the management team leading to a downgrade in the 'investibility' of BA stock. Both directly impinge the value of the BA shares thus reducing the overall worth of the company.

Our share price is trickling down at the moment due to corporate uncertainty over the restructuring package and its ability to sustain the business over the medium to long term. The militant, brash posturing of the unions in the face of the current employment environment is annoying the consumer.

The share price climbed on the back of the BALPA deal and is now dropping as the 30th June deadline arrives. The threat of IA could be the final straw that breaks the camels back. If the unions can wake up, smell the coffee and get on-board with the company then there is a possibility that such stabilising action will galvanise the city and banks into providing BA with a financial life line that it needs at a cost it can afford.

If not, then I fear we may be sliding ever quicker down the slippery slope to becoming the next General Motors.

WW will go through with his plans which includes less crew onboard. The offers for part-time and VR would also be withdrawn and instead CR takes action.

BASSA would probably react by sending out strike ballot paper! There is also a scheduled union meeting on July 6th.

Horse? Bolted? Door?

Pilot VR
 

Bellerophon, you tried to help clarify the pilot's VR deal, please see your below quote:



"Pilot VR offer is two weeks' basic pay, per year served, capped at 52 weeks."



You are nearly there. We were told that if we had completed 20yrs we would get 52wks basic pay. The top 500 senior pilots were to be sent out the VR proposal automatically. If you were junior to 500 you were able to contact flight ops and request a VR proposal to be sent to you. I am just below the 500 figure in seniority and have 20yrs service. For this reason I think it is fair to say that all "500" pilots would have been offered the 52wks.

Anyone below this would have had to have a formula applied to them as they were probably just below the "20 yrs" service. I do not know what formula was applied and you may be correct that it was 2 weeks pay per year served(?).

I am aware that some of the CC I have spoken to have felt that we were possibly offered a better VR deal than you are being offered. I do not know your full terms and conditions but I can confirm that our offer does not include allowances/flight pay, it is simply based on basic pay.

Hot rumour - BASSA reps are not turning up for all the meetings with the company! Doh!!

Mmmayday38

I think you'll find they are exactly the same as yours! ;)

You're correct in saying that, for some people, their offers vary slightly from the "two-weeks-per-year" formula that I posted in the interests of brevity, although I'm told that is the basis of the calculation. Part-timers benefit greatly in that no reduction is applied, 20 to 26 year pilots benefit slightly by receiving the maximum 52 weeks, whilst trainers, by my calculations, lose out slightly.

In passing, I can't help but notice that the management severance deal at Xmas was 3 weeks per year capped at 78 weeks, and, so I'm told, LGW ground staff were recently offered 4 weeks per year capped at 78 weeks.

I didn't have to request a quote - for some reason it arrived automatically - and I shall leave as soon as possible; but I'm sorry, although not altogether surprised, to learn you're thinking of leaving.

Best Regards

Bellerophon

Bassa Supporter
 

Just some other news: Willie Walsh's plan to have staff work for free has been condemned as "illegal" today by Yvette Cooper, the Minister for Work and Pensions.

Any savings from the BALPA deal have been lost as passengers book on rival airlines due to all the bad publicity from BA management, scaremongering its staff over the airlines financial position.

Is British Airways trading whilst insolvent?

Bassa Supporter
 

"WW will go through with his plans which includes less crew onboard. The offers for part-time and VR would also be withdrawn and instead CR takes action.

BASSA would probably react by sending out strike ballot paper! There is also a scheduled union meeting on July 6th."

Who gives you the authority to make statements like this NUIGINI? You do not know. It is an opinion, but you write it as if it is fact.