PPRuNe Forums - BMI mainline pilots made redundant?

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Fingers crossed for everyone!

Potential news of a Granite deal coming to fruition sounds positive. It will also help BA's PR.

It does however need to be seen in the context of the financial strength of those buying it, i.e. how much funding is actually being invested, as none of us want to see the Newco go bust six months down the line and staff negotiating with the administrator for any redundancy.

The discrimination against regional/loco pilots is not new, indeed there was an article in the BALPA Log at the time of the disposal of BA Connect to Flybe entitled BA and Apartheid which raised these issues.

Having said that, the attitude of the BA guys on here, seems a lot more positive compared to the attitude back then, so it seems a bit harsh to criticise them for welcoming their new colleagues.

As has also been pointed out (as yet at least) the baby and regional guys have not been notified as being under threat of redundancy, and if suitable buyers are found, then there's no issue. If however things don't work out and redundancy becomes a reality, and at the same time BA is still recruiting externally, then that is a very serious issue that BALPA, and all of us who are members, whether as BA, (ex) BMI mainline, or any other part of the pilot community, need to be prepared to take a stand against.

Have the T&Cs for the former BMI mainline pilots that are joining BA been announced yet?

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If however things don't work out and redundancy becomes a reality, and at the same time BA is still recruiting externally, then that is a very serious issue that BALPA, and all of us who are members, whether as BA, (ex) BMI mainline, or any other part of the pilot community, need to be prepared to take a stand against.

The very best they will be offered by BA is a place on the next available selection dates for DEP, competing to keep a job against all the external applicants. This is all they have offered to other BA subsidiary pilots faced with redundancy in the past at a time when external recruitment was ongoing for mainline.

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Have the T&Cs for the former BMI mainline pilots that are joining BA been announced yet?

Not yet. Discussions are still ongoing. The minimum they will get is TUPE but hopefully they will do better.

I'm all for baby and regional guys being offered opportunities to become assessed for DEP positions, however the train of thought that BA has some moral obligation to provide direct entry a la mainline is a step beyond. Ideally baby and regional get sold off, minimising disruption and anxiety to the pilots in both organisations. IAG aren't integrating baby and regional into BA, therefore they have no legal obligation to provide new positions. BA have people within their holding pool which they have already selected. ALL of these people applied to BA long before the intention to purchase bmi was even announced. If you WANT to join BA then apply and hoop jump like the rest of us. I'd be surprised if IAG management came to your rescue, especially given the amount of redundancies occurring within the bmi group external to the overall pilot body. I could of course be wrong, however I believe offering regional and baby pilots first refusal on assessments is pretty fair.

callsign kilo

Just playing devils advocate...but then by what right are bmi mainline pilots getting direct entry into BA? They haven't passed any selection for BA either and are jumping ahead of people waiting in the hold pool who have passed the selection.

TUPE and employment law thats why. You could also say that given that they currently operate in and out of heathrow on the aircraft ba will be using, on the routes they will initially fly and that they have been assessed both by bmi and the authority as competent that they are suitable to fulfil the position, or would a 1/2 hour sim provide a better assessment. :p

Well said Van G...dont forget that BA will be having a good look at Training records/Personal files of some of those BMI people who have had difficulties in the past, not so much with handling issues but CRM issues They did this in 1992 with a few of the Dan Air LGW B734 people to weed out those with CRM issues. Watch this space.

Given bmi's reputation for training within the industry it is highly unlikely that there will be many rouge pilots amoungst them but Flap 80 is right I am sure training records will be looked at and maybe some will be singled out for additional training / assessment during their integration. However TUPE is legally binding and these guys have all passed bmi assessment which is no easy task either.

"Rouge pilots?" I think BA would employ them regardless of their colour :-)

Rogue..... What a numpty :ouch::D

bex 88. I was asking with reference to a previous post and playing devils advocate.

But whilst I'm here, peoples backs are up at some bmi mainline pilots not just because of their selfish narrow minded posts on here. It stems from the most ridiculously insensitive and arrogant behaviour witnessed on the crew bus, crew room etc and I guess this forum provides an area to vent that frustration. Crews endlessly discussing seniority issues sitting right next to people who have no idea if they have a job at the end of summer, or even in a few months time. People joking about getting hats...

Yes I am happy you have a job. Yes you have a right to be happy, but back slapping right now in the public domain and aforementioned crew room/bus idiocy is at best insensitive given the uncertainty of your colleagues futures. And just because our jobs aren't officially 'at risk' are you really suggesting there isn't a real and immediate threat of redundancy to us? Because I assure you there is.

So all the best with your future. But please get down of your high horse, save me the TUPE lectures and show a little humility.

You asked a question and I gave a straight answer. As for crews joking about wearing hats on the crew bus etc you are right it shows a complete lack of empathy and regard for other peoples positions. Seniority discussions are relevant but again showing a bit of sensitivity and not discussing this in public would be very welcome to me as well! If people are doing that you should say something as it may help focus the mind of others. The tread topic though is bmi mainline pilots made redundant and some are in a even more time critical position than maybe yourself.

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I see your point Van G, of course I do, however as one poster has already stated - legal obligation is binding. And if I can also play devils advocate, then do things become interesting when BA look at the records and see the names of x,y and z; noting that they went through their process and failed. BA's recruitment strategy is based largely on assessing psychometric and non techinical ability. It appears that BA believe that there is a partcular personality fit suited for their organisation. Those guys making fleeting and insensitive remarks in the vicinity of troubled colleagues, inavertently or not, are usually the type to send alarm bells ringing. Unfortunately for you and me, the 'no I in teamwork' brigade are generally a clever set of egotistical barstewards with Jekyll and Hyde type personalities.

Someone also suggested that a training department with highly respected standards is unlikely to harbour many rogue pilots -It's simply not the case, I can assure you! You can lead a horse to water, but on many occasions it simply won't drink. Many people, once conditioned, can also play the game a handful of times, when required to do so. However new and unfamiliar surroundings can often see them become unstuck.

Just something I've noted in my travels.

Just been talking to an old friend in bmi Mainline. The pension situation sounds shocking. It would seem that some people are likely to loose up to 40% of their pension since Lufty dumped the final salary pension in the government run emergency fund. The PPF was intended to provide some measure of protection to employees of companies that had gone bust - not the case here.

How is it that the German former parent company who are worth billions and the new owner who is also worth billions can get away with this? It is a scandalous situation and it sounds like some pilots are champing at the bit, ready to take some sort of action over it. In pension fund terms the black hole is not that big...

I am not sure why IAG should be responsible for the pension blackhole, they bought BMI with the proviso that Lufty would keep the pension liability. Indeed there would have no deal if IAG had to pick up this liability. How Lufty then manages to duck it's obligations to the pension while still being solvent is a mystery.

The Sunday Times(29 Apr) has an article related to the Bmi pension issue - makes for an interesting read.

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John Smith jumped up from his armchair as the letter box snapped shut. The pilot rushed into the hallway of his Hampshire home and tore open a letter from his employer, BMI British Midland.

As Smith (not his real name) read the letter from Clive Grimley, chairman of the pension trustees, an awful truth dawned on him: his plans for a comfortable retirement had been dashed.

Lufthansa, BMI’s owner, was washing its hands of the carrier’s pension scheme. A deficit of £180m (€220m) meant there would not be enough to pay the promised pensions.

Instead, the German airline was dumping the liabilities on the Pension Protection Fund (PPF), which is normally used to rescue the retirement plans of insolvent companies. Lufthansa would also provide an £84m sweetener to make up for some of the shortfall in members’ pension savings.

Smith, in his early 50s, had been looking forward to a retirement income of £43,000 a year — he reckons he will now be lucky to get £27,000. “Most of the pilots are in a state of despair and anger,” he said.

The PPF is bad news for well-paid workers, such as pilots, because it guarantees a maximum of only £34,000 a year for those who have not yet retired. It does not cover most inflation-linked increases to pensions, or widows’ or dependants’ benefits.

This is the first time a large, solvent company has been allowed to dump liabilities into the PPF and walk away.

The controversial deal emerged this month as Lufthansa sold BMI to International Airlines Group, owner of British Airways.

IAG wanted BMI’s Heathrow operations but not its pension liabilities. It received a huge discount on the £172.5m headline price after agreeing to take on BMI’s regional and low-cost arms, for which Lufthansa had failed to find a buyer.

The German airline’s jettisoning of the scheme has left pension experts and unions baffled because Lufthansa had pledged to support it after the sale to IAG.

Jim McAuslan, general secretary of Balpa, the pilots’ union, has written to Dame Anne Begg, who chairs the Commons work and pensions committee, asking for an investigation. He has also urged Vince Cable, the UK business secretary, to look into the matter. McAuslan fears other companies will use similar tactics to get out of their pension commitments. “This is a solvent, gold-standard German company transferring a business to a gold-standard British company, and in the process the pension has been ditched under the pretence of insolvency,” he said.

So, what happened?

Lufthansa proposed to continue supporting the BMI pension scheme by setting up a British-based shell company, with no assets, to take over funding responsibility. The Germans would pump £10m a year into the scheme for 25 years. This was blocked by the Pensions Regulator because it was similar to the funding structure it had approved for Polestar, the printing company, which had a deficit of more than £500m. The Polestar scheme collapsed and had to be rescued by the PPF last year because the shell company had insufficient cash to make up a shortfall.

The Pensions Regulator sounded the alarm on Lufthansa’s proposal because the Germans would have had no legal obligation to continue supporting the BMI scheme if something went wrong in the future. The watchdog decided that a safer option for the BMI workers would be to transfer the airline’s scheme to the PPF.

Lufthansa was desperate to end its exposure to BMI, which it took control of in 2009 for about £300m. Since then, it has struggled to turn round the loss-maker — it is estimated to have lost more than £1 billion on the investment.

Lufthansa confirmed it had proposed using a shell company to manage the pension scheme, but said the regulator had rejected the proposal because it was deemed too much of a risk.

John Ralfe, a pensions consultant, asked why the regulator had not used more forceful tactics to persuade Lufthansa to take on the liabilities. “The regulator has very strong powers that it appears to choose not to use,” Ralfe said.

Sources claimed the regulator and BMI’s trustees felt under pressure from Lufthansa to seal an agreement on the scheme. If they had not done so, the deal with IAG could have collapsed, raising the threat of the Germans pulling the plug on their British subsidiary. Under this doomsday scenario, BMI would be made insolvent and the scheme would have ended up in the PPF anyway — but without the £84m sweetener.

Jim Snee, a former BMI pilot who retired in 2008, said the debacle had been a “rude awakening” for members of the scheme. It also sent out a warning to younger people about the value of saving into a workplace pension, he said. “Why would you invest your life savings in a scheme run by nefarious people who aren’t properly policed?”