Sorry Hasher. In this game you make your own breaks. :suspect:

No fun you lot!

We like a laugh.. but in this case not at our expense...:hmm:

Anyone else see the irony in these two sentences?



10% is more than any other airline in the world is making at the moment. A quick search shows that I am not the only person who knows that. Take a look for yourself; http://uk.search.yahoo.com/search?p=...F-8&meta=vc%3D

Every airline except (thanks to Airline Business) the below at operating margin?
So not every one then.

2005 (2004) 2005
20 (22) Emirates 11.5%
47 (47) Ryanair 21.8%
49 (61) SkyWest Airlines 11.2%
54 (52) ExpressJet 10.0%
63 (72) Jet Airways 22.3%
72 (76) Mesa Air Group 11.4%
74 (95) Gol Transportes Aereos 23.3%
86 (97) Republic Airways Holdings 17.5%
99 (103) FL Group 43.1%
102 (111) Kenya Airways 15.0%
122 (127) Evergreen Intenational Airlines 12.1%
130 (128) Middle East Airlines 15.9%
131 (133) ASTAR Air Cargo 12.5%
137 (142) Air Transport International 11.4%

And more profitable? Except for Air France-KLM at $1,109m net profit?

And that is only the top 150 - higher margins may be found elsewhere...

Don't see too many western airlines in that list their lucifuer. Lots of low cost base Asian or African carriers, looks lke Ryanair is the only recognisable European operator in there. What was AF-KLMs operating margin again?

Emirates = Middle Eastern Full Serv
Ryanair = Western LoCo
SkyWest Airlines = US Regional (United/Delta)
ExpressJet = US Regional (Continental)
Jet Airways = Indian Full Serv
Mesa Air Group = US Regional (United/Delta/US/self)
Gol Transportes Aereos = Brazilian LoCo
Republic Airways Holdings = US Regional
FL Group = Icelandic Holding Co
Kenya Airways = African Major
Evergreen Intenational Airlines = US Charterer
Middle East Airlines = Lebanese
ASTAR Air Cargo = US Cargo (formerlly DHL)
Air Transport International = US Charter

AF-KLM Op Margin = 4.4%

Need I say more, other than that one is African, one is Asian, one is South American, two are Middle Eastern, and the remainder are more Western than Western gets. Unless perhaps you wish to sub-segregate further and argue all night?

Lies, Damn Lies & Statistics
 

All very interesting Lucifer but none of it changes the facts much.

BA say they can't afford to pay. I think they can (along with BALPA and most of my colleagues).

There will be some brinkmanship going on at some point. I am prepared to play my part in that.

Well you have rather proved my point there Lucifer:

Emirates = Middle Eastern, Low cost base, government funded.
Ryanair = Western LoCo, the only one, as I mentioned
SkyWest Airlines = US Regional (have you seen what they pay?)
ExpressJet = US Regional (See Skywest)
Jet Airways = Asian, low cost base
Mesa Air Group = US Regional (See ExpressJet)
Gol Transportes Aereos = Brazilian LoCo - developing world, low cost base
Republic Airways Holdings = US Regional (See Mesa Air Group)
FL Group = Icelandic Holding Co - what else so they hold
Kenya Airways = African Major, low cost base
Evergreen Intenational Airlines = US Charterer (lots of work for Uncle Sam)
Middle East Airlines = Lebanese - developing world, low cost base
ASTAR Air Cargo = US Cargo (formerlly DHL? DHL still flying.)
Air Transport International = US Charter (lots of work for Uncle Sam)

Apart from Ryanair I don't see a single recognisable western major in there. Lots of developing world carriers, some with government backing, and a lot of US regional carriers. You're hardly comparing like with like are you? Unless you think operating a couple of hundred commuter aircraft as a franchise is the same as operating 160 widebodys and another hundred or so 100+ seaters under your own brand. I don't even see Jet Blue in there. Show me the major carriers making a 10% margin in any developed nation that has any form of social/welfare infrastructure.

i reckon this was started by overstress because ba pilots who have contributed all thier service years to the pension and now they been told they are not getting all of it .this is not about the money ba makes or other airlines are making ba has a pension fund of 12 billion and bank of amercia is looking after it allegedy very well .
most of the people replying in this forum are non ba persons and by what i read are only glad the ba pilots are not getting back what they have contributed .
i think this is bad attitude or most probably jealously
we need to support these guys,who knows tommorow some of the airlines you guys join may decide to do a ba .
and if ba pilots are successfull in thier quest it will benefit all the people working as flight crew
it is time boys and girls to get behind these people and support this good cause

It is about how much BA makes, because BA makes enough money to pay the pensions. It was not a "promise" like some people like to call it, it was a legal document, a contract of employment, and they can't just change things they way they want and anytime they want.:=

I am just thinking of the enourmous bonus "some managers" would get if they manage to convince the Pilot force to accept the new rip-off deal.
How about that....where do they get the money for that then? And it clearly shows how really and honestly concerned they are about BA's debt and deficit......:yuk: Call it integrity...:yuk:

No, it was not - you don't help the cause by posting incorrect facts. A defined benefit pension is not a promise - what you mean is that they have a moral obligation to pay.

The trustees could indeed change it unilaterally - not that anyone in their right mind would do so, hence all the action to convine all and sundry that they cannot pay. The fact that it is in the contract is irrelevant quite frankly - legally there is no obligation.

Pure and simple - this is a moral obligation around which people have planned their retirement, and upon which basis as part of the package, they recruited huge numbers, and for which they can (probably) afford to pay through some means.

Ok I understand your point and I apologise for the incorrect words I have used. Moral obligation to pay = so why not respect it then.
I do not see anything MORAL in the company's offer of a bonus and in the managers' acceptance of a huge bonus if they manage to change this "moral obligation".

Did anyone see the Evening Standard 9th August?

I forget the exact text but BA has set aside £75m worth of shares this year to reward the directors!

Nice.........

My point exactly.....:ok:

But these are share options, not cash and not money that is going out from the company. They are simply 20,000,000 new shares that have been created, which dilute the shareholding of the other shareholders. So similar to saying to Mr. Schroder that instead of 3.90% shareholding in BA, he now has 3.899% as the number of shares he holds are a smaller proportion of total shareholding. Share price shifts a little to reflect this, and the shareholders gain when management work to increase the value of their holding as they are incentivised to do so.

Anyone can afford to do that - there is no cash involved!

Yet the latest management line is that BA are destroying shareholder value. Well if they keep offering the directors shares options they can hardly be surprised.

Now what about the £850 million provision made for a possibie fine for pricing or the fees to Boeing to secure delivery slots for 777s. Will they be paying for those in share options?

As for incentivising the directors, do we not already pay them a healthy salary to ensure the company performs well?

sikeano you are quite correct. Thank you for your support.

Then what on earth is it, lucifer? Presumably those contributions I've been making all this time were just 'moral obligations' as well?

On second thoughts, you're right. Our managers have no morals, so such 'obligations' mean nothing to them.

I agree with you! First time for everything ;)

Stop talking. Go for it!

Will BA LPA be topping up your pension contributions during the strike or would that be financially unviable for them too?

Saxon Ops

Saxon OPs. Your posting is incomprehensible to me.

BTW no-one is 'topping-up' their BA pension at the moment as variable contributions are suspended.

The thing that strikes me is, couldn't you all have seen this one coming a long, long time ago?

Every industry has or had the same problems. If you want the airline to survive, it'll have to be done. Of course, no bonuses should be paid etc. But by sobering the pension for new joiners, the more senior people in BA have first tried to rescue their own pension over the new joiners. It is clear to me, that there is a group of people in BA, who only care about money and themselves.

I know some new joiners and the absolutely ridicilous pay and pension schemes they are on. It's not very well divided!

Actually overstress variable accrual rate is still available for NAPS. I changed back to 45ths in April. Thought it best to lock in as much value as possible just in case it all turns to worms.

I have not read all the posts in this thread but have got the general gist.

Am I basically right in the assummption that BA pilots (and presumably other staff) are very unhappy because the "defined benefits" pension scheme is underfunded and BA say they cannot afford to top it up to be fully funded?

If I am wrong just tell me.

I am nothing to do with BA but have just gone through a very similar experience with my own employer (whose trading margin by the way is 5%-6%) - as have hundreds of thousands of others.

Fact. Life expectancy has increased dramatically in the last 25 years and this means that pensions will have to be paid for longer.
Fact. The chancellor changed the tax rules on pension funds so that the rate of return on investments is effectively lower.
Fact. Stock market perfromance since the 90's has not been good giving poor returns on the money invested.
Fact. the method of calculating the funding level of pension funds has been changed to be a lot more conservative making the picture worse for the future.

These four factors basically mean that the pension fund has much bigger liabilities (current & future pensions) with a much reduced future income.

You might not like it and it might be painful but that is what has happened it is not unique to BA.

So what would YOU do in similar circumstances? Your ONLY choices are:-
1. Try to reduce the liabilities by reducing future pension liabilities
2. Start transferring money into the ever increasing hole - without any certainty that that it will help in the medium or long term
3. Do some of 1. and some of 2.
4. Do nothing and let the pension deficit force the company into liquidation so that there are no jobs and no pensions.

Those are the stark choices, there are no others.

If you can be bothered to type your opinion Chox, don't you think it would be courtesy to read the whole topic first.

I don't necessarily disagree with any of your 'facts'. But you're missing one vitally important one yourself...

BA say they can't afford to pay. We (i.e. the pilots) don't believe that is true.

We know what they have planned, there hasn't even been much attempt to disguise it (a little bit of a softening up campaign, which unfortunately seems to have worked on other staff groups)... A simple case of renege on the promises made to our staff so we can drastically increase our profitability and increase the bonuses and share option values of the senior managers and directors.

We are simply not prepared to let them get away with it. BA have just jumped on the bandwagon due to the media coverage of the 'pensions crisis'.

They can afford to pay. It's as simple as that.

Chox,

On the basis that BALPA's accountants have proved BA can afford to pay the pensions as they are, and clear the deficit, I'll go for option 4.

Fairy nuff.

I did state that I had not read the whole lot - (45 pages not all "on topic") and will withdraw with two final thoughts.

If BA CAN really afford it now - what about next year and the year after - this is a long term problem.

2005 - "BA last year nearly doubled its contributions to £225m, but the deficit still rose by £205m to £1.4bn" - it now (July 2006) stands at closer to 2 billion - half the total value of the balance sheet. Your company is at REAL risk.

Well, if they start announcing massive corporate losses at any time in the future, we'd have to look at all options to help them survive. That is not where we're at currently.

BA have paid off massive amounts of debt in the amazingly difficult trading conditions since 911... Circa £1.2 billion per year!

Now the good times are here for a while (notwithstanding last week's little hiccup, of course) a quick £1.2 billion into the pension fund should keep it going for a while. If it does all change in the future, I'd feel more inclined to dig in a help out if they were to act decently now.

They are not at REAL risk. They are ROLLING in money!

True,- BA's "debt" has been going down annually , but that is largely just another year's aircraft leasing and financing costs,- not bundles of spare money from profits. As each year goes by and these costs are paid ,they reduce the outstanding liability under the contracts. Eventually as the leases expire and the aircraft are handed back to the leasing companies and banks the debt becomes zero. Wonderful . The only problem then is that there are no aircraft left, so all flying ceases. By not adding much needed long haul aircraft over the last few years BA have been able to show these " debt reduction" figures ,but they are acheived at the expense of expansion and handing markets and market share to the competition. Fact is BA is far from flush with cash and , relatively, they are shrinking. It is called managed decline.

True, but those are planned, obligatory payments determined at the start of the many debt structures financing the aircraft, whose presence is required to earn the company more money.

Earnings after interest and tax are what you should focus upon - those indicate that there is spare cash to be found - what can be used for the fund has to be balanced between future investment, ensuring promises are kept to some degree, and rectifying the appalling situation where everyone sat back and allowed new joiners to have an appallingly lower pension.

Ah - thanks maxy. When we've sorted out this mess I'll be increasing mine.

Thought it might be convenient to bring this to the top as it might be about to get interesting! BALPA are meeting BA this week (Wednesday?) on the 'new' £2.1bn 'deficit' and the results won't be pretty.

The results of the meeting will decide whether negotiations continue or not. BA BALPA members have been advised to prepare for 'all eventualities'

IF many of the posts on the BMID industrial action thread are to be believed, I hope 'all eventualities' will not include similar behaviour by the BACC to that of the BMIDCC - IT WOULD APPEAR as tho' the BALPA members in BMID have been treated less than honourably........................:(

€200m for Aer Lingus?
 

Hmm, I wonder how you lot (BA) would/will react when BA announce they've just spent £150m on buying Aer Lingus shares to help them defend being taken over by Ryanair!?! :eek: After all, you wouldn't want Ryanair on your front doorstep (LHR) now, would you??

And Ryanair won't be on our front doorstep cos O'Leary isn't stupid and knows Ryanair won't work at LHR in a million years. In fact I think he's said as much publically. Too expensive and too many delays to make a loco operation work.

Suggest anyone that wonders why we have so little faith in our management as purveyors of truth on this, or any other issue, watches BBC2 at 10pm tonight.

2 senior BA managers resigned today after 3 months gardening leave over allegations of illegal activities.

Compare and contrast managements shady activities to the hand wringing that goes on for days here when we, or colleagues in other airlines, make borderline decisions under extreme pressure that are not even close to being illegal, and yet are dissected at will, with wonderful hindsight, out in the open.

BA has a host of quality people who do a fine job for the airline and who are not always appreciated. But the same goes for most large companies. It would be a bad move for pilots to strike - it will only prove (as far as they were concerned) to management that pilots are a bunch of whingeing wasters, and in future their fine efforts will be demeaned even more.

No, a more mature and responsible approach would be better at the moment. BA needs all the help it can get in a number of areas. Top management is close to getting a bunker mentality, and no one would benefit if they do go that way.

Is that similar to the silo mentality they have been demonstrating for years?

The management of BA would make an interesting subject for a thesis on how not to manage a large company.

What would that be? Agreeing to work an extra 10 years to get 50% of the pension I'd have previously got?

Blueprint
 

Having posted some ideas on this problem many pages ago (last yr), it is clear it is now coming to a head. It needs to as the NAPS debt has now increased by circa 130% since the last valuation and is probably already several £100M higher than the March 31st 2006 number.
I do not have the exact fund value to hand but suspect the current deficit number is close to 50% of what is needed to make NAPS viable.
Like any debt once you get behind the drag curve in a big way you just never catch up, unless you inject a huge capital sum. The current BA capital offer is clearly now only going to scratch the surface, so any future valuation is still going to be bad and unbalanced.
So what to do?
For the company I believe it has to give notice and close the scheme, (make it paid up). It can do this with 6 months notice. This will give them a huge liability but at least its crystallized their debt. They then negotiate with the trustees, a payment schedule, say £250Mpa over 10yrs. They can afford this as has been seen by their recent payments to reduce their capital debt.
They enrol the NAPS staff into the new money purchase scheme.
For the staff (NAPS people) I believe this is the fairest way as any benefits already earned are fully protected. As it stands the hybrid scheme being currently discussed is going to lead to "death by a thousand cuts of what has already been earned"
Why?
Because
1/ Staff will have to work longer to get their pension
2/ The benefits will be reduced by the lower accrual rates and inflation proposals
3/ If the scheme is still not in balance then BA will come back for more concessions
4/ The two current schemes within the BA workforce will lead to greater industrial disharmony as more and more new entrants join the current money purchase scheme.

I know its tough but at least it gives some future to BA and its workforce.

Blueprint, your proposals are way too pragmatic to fly.