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BMI redundancies/in intensive care

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BMI redundancies/in intensive care

Old 2nd Feb 2009, 11:28
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BMI redundancies/in intensive care

From The Times
January 31, 2009
Threat of job losses hangs over bmi as airline reneges on pay rise promise
David Robertson

Bmi, the UK’s second-largest airline, has broken a promise to 5,000 staff that it would honour a pay increase this year and has also warned of possible redundancies.

Nigel Turner, the chief executive, promised only two months ago that the pay deal, which was agreed in 2006, would be honoured despite the downturn in the aviation sector. Staff were due to get an increase of inflation plus 0.5 per cent.

However, in a letter to staff this week, Mr Turner said: “I regret to say that although I had earlier indicated that the agreed pay award for 2009 would be implemented, it is now the wisest and most sensible decision not to pay this award and impose a pay freeze for the current year.” He added: “Freezing pay enables us to limit to the minimum those we may need to make redundant.”

Union leaders are understood to have met bmi employees last night to discuss Mr Turner’s letter and could call industrial action.
Related Links

* Virgin Atlantic in BMI talks with Lufthansa

* Bmi to end Manchester-Chicago services

A bmi pilot said: “This combination of events has led for a call of industrial action as the notice received also finished with suggestions of redundancies in the near future.”

Staff are understood to be furious that bmi delayed this month’s pay cheques to remove the pay increase. This is understood to have left some staff short of cash and unable to pay their mortgages.

Mr Turner said last November that bmi would be “in intensive care for some considerable time”. He added this week that results would be the “poorest in recent times”.

Bmi had planned to freeze pay from 2010 but bringing forward that action by a year will enable it to save about £7 million.

Lufthansa, the German flag carrier, is buying the airline. Sir Michael Bishop, the chairman, sold his 50 per cent stake to Lufthansa last year for £380 million, giving the German carrier a total holding of 80 per cent. The deal is expected to be completed in March.

Mr Turner said in his letter to staff that Lufthansa had demanded management take all necessary steps to ensure the recovery of bmi.
Holer Moler is offline  
Old 2nd Feb 2009, 14:20
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bmi - Vote of no confidence in CEO Nigel Turner

Yes, that is correct.

Balpa, (to their credit this time) very promptly jumped in at the end of last week to make a clear and firm response to the recent incredible acts of the bmi CEO Nigel Turner.

bmi mainline Flight Crew received payslips at the end of last week showing that their January pay reflected the 2009 pay rise (effective Jan 1st, and RPI + 0.5%).

This was the third year of a negotiated and balloted 3 year pay deal resulting from a long and involved dispute with the company in 2006. The three year deal was not requested by BALPA but was requested by Nigel Turner at the time. One presumes that they wanted some longer term definition to expected future costs running up to the shareholder put/call options of late 2008/2009 and also wanted to save management time. No fantastic sums involved, just RPI plus a bit for 2007,8 and 9.

The agreement was kept to for 2007 and 8, and Nigel Turner confirmed to staff in a memo in late November 2008 that although times were hard "....we made a commitment to a three year deal and I believe in honouring our commitments."

And so last week's pay slips looked ok.

And then the Machiavellian (and possibly illegal ?) acts that bmi is becoming well known for, in its inept, insensitive and cruel handling of its loyal and hard working staff took place.

Shortly after receiving the payslips, staff received a memo from NT saying he had now changed his mind from the late Nov 2008 memo , and that there would now be a pay freeze in 2009. Nothing about "honouring commitments" anymore.

And it got worse.

Last week crews were paid in many instances the increased amounts reflecting the 2009 pay deal, only then to find the next day that this money had been withdrawn by the company from their bank accounts. This was all done without any pre-notificiation from the company that this highly questionable act was taking place. To make matters worse flight crew then were not re-paid until a day or so later and this was then at the old 2008 pay level.

The consequence of this were bounced debits, mortgage payment issues etc, as funds that were meant to be in crew bank accounts were not when they should have been, and the amounts were not as expected or as had been notified by payslips.

The two main issues were that:

Crews were working for the airline throughout January on the agreement that pay levels had been increased from Jan 1st under the negotiated agreement of 2006.

You can't really change your mind on this one month in to the new pay year just because it's time to actually pay the staff what they expect they were owed. But that's what NT did.

And crews were working to a negotiated and balloted pay agreement from 2006 that NT structured himself and had very recently confirmed would be honoured.

NT has effectively awarded the pay rise, and then taken it away without notice or consultation. Which then means it is a forced pay cut. The pilots would gladly have talked to management about it to arrive at a negotiated solution given the present times - but were never ever given the chance, only subjected to NT's ham-fisted management.

Hope all that makes sense and helps to explain why bmi flight crew & BALPA have all become so enraged with NT over the last few days because of the manner in which he has acted, and the percieved lack of morality and integrity that has been shown.

But this most recent episode is also against a continuing difficult background of bmi management which had already unsettled staff.

Since the announcement of the Lufthansa share purchase in October there has been no notification at all from Lufthansa or bmi management about what the future holds for the airline or the staff. Which leaves staff rather worried about their jobs and the future shape of the airline. And nobody knows when anything will be known. But Lufthansa management continue to muse about it in interviews to the press and say nothing to bmi staff. Nothing.

To add to that, the company has in the last few weeks told the pilots that they will allow cadet pilots who are not, and may never be employees of bmi, to fly passengers around because they will pay bmi for it. This will be done without passengers knowing about it and this operation has been set up without any prior consultation with the company's pilots or BALPA, which unfortunately is typical of bmi management.

And that's pissed a lot of the pilots off, particularly the FOs who feel their jobs could potentially be threatened by this new line of imaginative resourcing of pilots for bmi. It also raises lots of questions about what sort of risks associated with training inexperienced FOs are acceptable for the airline and the unsuspecting paying public when the training is not in the main interest of the company because the trainee is not an employee nor planned to be.

It is quite a different relationship on the flight deck because of those unusual circumstances. bmi pilots don't understand why the company wishes to expose itself to this unnecessary risk. They don't see how it is meant to fit in with what is supposed to be a highly professional and comprehensively safety audited LHR based operation, that is part of the Star Alliance, and on the verge of becoming a Lufthansa major subsidiary.

That's about the main thrust of bmi mainline pilot sentiment at present...

Last edited by upandoffmyside; 2nd Feb 2009 at 20:12.
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Old 2nd Feb 2009, 14:43
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Since the announcement of the Lufthansa share purchase in October there has been no notification at all from Lufthansa or bmi management about what the future holds for the airline or the staff. Which leaves staff rather worried about their jobs and the future shape of the airline. And nobody knows when anything will be known. But Lufthansa management continue to muse about it in interviews to the press and say nothing to bmi staff. Nothing.
Totally understand that, no Company taking over another wants to be embroiled in any cuts, changes or wage reductions etc, it produces negative press, they would rather the Company sorts that out before they take over, that way no negative press comes their way.
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Old 2nd Feb 2009, 15:31
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Never thought I would consider myself as having been mugged by my employer. I have not been paid for work I carried out in January. Quite an astonishing way to treat your staff. The CEO and all his cohorts on the board should be thorougly ashamed of themselves. Thank god they don't fly aeroplanes as we would have a hull loss every week.

It is however indicative of the attitude of management at ALL levels in this company.

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Old 2nd Feb 2009, 19:04
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51 Aircraft and 5000 employees - is that correct?
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Old 2nd Feb 2009, 21:33
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The agreement was kept to for 2007 and 8, and Nigel Turner confirmed to staff in a memo in late November 2008 that although times were hard "....we made a commitment to a three year deal and I believe in honouring our commitments."

Maybe he did,but BMI is in the hands of the Germans now and they call the shots, not him.
stormin norman is offline  
Old 2nd Feb 2009, 22:03
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I believe, the last time I checked it was a share sale. Under the terms of eu law the employees and contractual agreements are protected. Though I could be mistaken as I havent had dealings with share sales and asset sales for a few years now.
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Old 3rd Feb 2009, 10:08
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I seem to recall that MB exercised his previously agreed 'put' option forcing LH to buy his shares, thus making it a share purchase not an asset takeover.
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Old 3rd Feb 2009, 15:29
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bmi steals pilots' pay

A good summary from a Balpa Press Release.........

(Lufthansa have not completed the actual purchase of SMB's shares yet - in a month or two (possibly) the co. have said...)


Pilots in the airline BMI are now voting on a motion of no confidence in chief executive Nigel Turner as their union BALPA (British Airline Pilots' Association) is considering legal action after an unprecedented pay scandal.

Following extensive negotiations and, in order to avoid a pilots' strike in 2006, the airline proposed a three year pay deal for 2007, 2008 and 2009. Following a membership ballot the membership in BMI settled on this.

With effect of January 1 this year the third year increase was paid to the 400 pilots. But at a meeting of the BMI board some days later the company decided to renegue on the pay deal and pay nothing for 2009.

Worse, the company went into pilots' bank accounts without authority and took back the increases they had paid.
'This is as serious a situation as I have come across,' said Jim McAuslan, General Secretary of BALPA. 'As well as the pilots balloting on a motion of no confidence we are exploring legal action on these events that have absolutely astonished the lawyers.

'On Monday next week we are convening a special meeting in Frankfurt with all the other pilot unions in Lufthansa, the company that is purchasing control of BMI. The meeting of pilot unions from Germany, Austria, Belgium, Switzerland and the UK will discuss this unprecedented action and what we as pilots from the five countries can do about this.

'The tragedy is that not once did BMI or its parent Lufthansa come to us to say they had a financial problem. We could have discussed that. But they simply renegued on the agreement and took money out of pilots' bank accounts.'

Further information from Keith Bill on 020 8656 0860 or 07968 528 527
upandoffmyside is offline  
Old 3rd Feb 2009, 17:09
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This behaviour doesn't surprise me at all.

I won't go into details or mention names but I have personally witnessed behaviour from present and past senior members of the management team that was utterly astounding for it's unprofessionalism and petulence.

Some of these people would be put to shame in the playground of an infant school never mind the board room of a major airline.

Going into people's bank accounts and taking out money already paid is unbelievable!
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Old 3rd Feb 2009, 18:19
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bmi are also trying to farm out pilots to Thomas Cook for summer 09. And probably elsewhere.

I wouldn't trust the management as far as I could throw them. Memories of post 9/11 at bmi are not happy; the management's actions were prompt and brutal, affecting pilots, engineers, and cabin staff.
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Old 3rd Feb 2009, 18:49
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I am perplexed as to HOW anyone can remove funds from someones account without the account holders consent? Apart from anything else I would suggest you have a claim against your bank here!

Quite honestly until we all take a stand against the way are are treated in this crazy industry nothing surprises me anymore. Just walk out! Mass strike. It will give huge publicity to so many issues in aviation.

But it wont happen because "we are professionals." BULLSH1T!

What kind of professional stands by and watches the continual degredation of their qualifications and their industry and does nothing while the standard of living of their family is wittled away?

If this had happened 10/15 years ago we wouldn't be in this situation now!
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Old 3rd Feb 2009, 19:55
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Originally Posted by RoyHudd View Post
bmi are also trying to farm out pilots to Thomas Cook for summer 09.
Have the Thomas Cook pilots been made aware of this plan and do they approve?? Will these farmed out pilots be allowed back to bmi or in the event of a further downturn will they be quietly let go?

Holding back pay rises, farming out pilots to other companies and training pay as you go cadets, all very interesting and worrying developments within this company
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Old 3rd Feb 2009, 22:29
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Going into people's bank accounts and taking out money already paid is unbelievable!
And surely highly illegal ! I hope the lawyers have a field day on this one!
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Old 3rd Feb 2009, 23:00
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there is nothing untoward about the thomas cook secondment. They are short of pilots for the summer season, we are slightly over crewed.

BMI pilots will be paid at bmi pay thomas cook FDP and will remain bmi pilots throught out.
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Old 4th Feb 2009, 15:34
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Unbelievable! breach of contract at least - very possibly theft!

Would BMI now like to tell its staff what their futures are, post share sale to Lufthansa, because having them soldier on with the threat of redundancy hanging, whilst dipping their greedy hands in to their pockets is about as low as the lowest sweat shop employer would go.
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Old 4th Feb 2009, 17:29
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Trouble now will be that the CEO's credibility will be completely undermined, not just by the pilots but by all staff. It will not be possible to believe anything he says again. Not a great position to be in when you have to get your staff together to 'save' the business. I think the situation is probably far more serious than most people would be prepared to admit given the current climate in the industry. A replacement needs to be found, and fast.
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Old 4th Feb 2009, 20:22
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And now SAS want to off load their shareholding. Given their desperation, and the state of the economy it won't be going to a high bidder, so I can't think that this will be great news for BMI. Bit of a cr*p situation. Tough break chaps!
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Old 4th Feb 2009, 23:34
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Quite correct bmimainline, Nigel Turner has lost all credibility with the staff now over this debacle. Nobody will believe in anything he says from now on and this makes his position within the company untenable. A very, very badly handled move on his part. I'm surprised SMB hasn't ousted him as yet, if he doesn't I'm sure Lufthansa will.
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Old 5th Feb 2009, 07:12
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Austin once reckoned that Nigel would buy aircraft from Asda if he could.

But only if they were on special offer....
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