It rather depends how you work out the figures. The City certainly haven't been duped, unlike a lot of BA employees. Both deficit calculations (2003 and 2006) were worked out using different methods. The former method was the legal accounting standard at the time for calculating the deficit. However, the 2006 figure (IAS19) is considered to be the more accurate. What am I getting at?

The 2003 deficit was £928 million, not using IAS19. Had the same (less accurate) method been used this time round, the deficit would indicate around £960 million. Therefore the deficit would have increased by 3%.

This more accurate IAS19 standard was available in 2003 and would have generated a deficit of £1.6 billion. Therefore the deficit has increased by 31%.

However you look at it, IT IS INCORRECT TO COMPARE THE £928M OF 2003 WITH THE £2.1B OF 2006.

BA knows this. So why haven't they republished the 2003 deficit using the more accurate IAS19 standard, so that we can compare like for like?

IMHO because they can legally get away with not doing so. If they can say to the employees that the deficit has more than doubled and we need to shaft you for half your pension, it sounds far worse than to say that it has increased by a third and we need to have a chat about slight changes to your benefits.

Yes, it is that simple. I'll let an accountant explain the detail.

BA are shooting themselves clean through the foot with the proposals as they stand. If passed in anything like the current form, or if we are all moved to the ludicrously-named and wholly nominal BARP, the meanest DC scheme in the major airline industry, then they are going to find, longer term, they lack pilots to fly the aircraft with.

It has become an utterly hostile, sinister place to work with new entrants facing a static promotion structure, outright management hostility, low morale, and crippling workloads {900 hours a year on an A320 through LHR for a thirty five year career - you'll be dead long before you retire}. Those nearing 55 now are already understood to be in a loose pact to resign if things get too bad to secure their accrued benefits. With our ludicrous crewing arrangements that alone will leave the flying programme shot to the proverbial. New entrants will be thinking long and hard about staying with BA too. The squeeze will come at them from both ends.

BA is in need of root and branch reform at management level - the recent senior resignations being but the tip of the iceburg of a culture of cynicism and contempt. They can afford far more than they claim in the pensions arena and its about time they faced reality and, as a first step, ended the culture of lies and spin that is endemic throughout senior management.

Human Factor

I actually agree with you for once - you are entirely right that the two valuations are incomparable per se. An increase has however occurred, which is unsustainable.

Speaking as an accountant, I think that Blueprint's proposal is the best route to take - not as I believe it right that people receive less than the terms on which they were recruited (a moral argument with which I agree), but that longevity keeps rising and rising.

If actuaries and the doctors who advise them do not know how long people will live, and bearing in mind longevity can only really be derived from the average age at which people now are dying, I cannot see how it is sustainable to have revaluations extending out another 50 years that add another 6 months of liabilities on each occassion to any company.

Ironically, the only hope for the short term is for the economy to overheat, raising interest rates, which in turn will discount the liabilities to a greater extent than at present (effectively lowering the burden on the balance sheet).

The only point that I must disagree with is - as before - the point that debt has been paid down. This debt was arranged at the time the aircraft were bought, and is not only highly planned and visible, but is not a "free cashflow" that is available to divert. Without paying this (which was continually paid through all historical years), the assets would be removed by the banks, terminating all revenue-generating ability of the company.

BA's huge problem from a company perspective is paying a large amount into a scheme, which - if the valuations improve so that it is no longer in defecit - the company cannot get back until the last NAPS pensioner expires, which is galling if the amount is massive. To counter this problem, some companies have put the surplus payment in a escrow account or trust, so that it is not caught up in the pension, but is available to pay down the defecit - a better situation for all parties, as the company has resources available if the pension markedly changes, and the pension has the resources to pay all that was promised.

I realise that it is galling to lose what is effectively expected, but it cannot be a zero-sum game.

BARP must also be improved as a priority, as if you do not get the whole workforce on the same side, you will be stuffed. It is a desirory contribution from the company, which should be at least half the employees contribution up to the maximum permitted in a year dependent upon age.

The directors should fire all the management and start again with some fresh-faced 25 year-old MBAs in my opinion. At least they might understand how to motivate and engage the workforce. It's worth taking a chance!

Quite honestly, I'm not interested in all the whys and wherefores!

I think it's high time ALL the Trades Unions clubbed together and lobbied parliament relentlessly about the state of ALL the UK Pensions.

Margaret Thatcher's Government first knew that there was a major problem when Robert Maxwell disappeared at sea, yet they did nothing and successive governments have allowed the pensions crisis to worsen and worsen!

Gordon Brown himself has exacerbated the situation by greedily grabbing taxation from pension contributions!

The Government created this problem by creating greedy, avaricious employers - it's up to the Government to dig us out of the hole.

.........and for heaven's sake, let's stop talking about pensions as if it's something we have to beg for cap in hand! It is actually DEFERRED EARNINGS and our right to retire and enjoy our twilight years with a bit of dignity!

I appreciate what you're saying Re-heat.

However, I remain at a loss to understand how a company that has been making consistent profits for the past few years, despite security threats and minor industrial strife whilst all the time paying off other debts at the rate of £1.2B per annum, all of a sudden decides to stop paying it's debts when it has the means to continue paying.

Because the banks will punish BA if they don't repay their debts, but BA management are gambling that the employees will not punish them for the same.

...and they will find a greater resolve amongst the pilots than they expect. This dispute will shape BA for the next decade or so. WW will either be gloating all the way to the bank, or be heading off back to Ireland with a collective boot up his jacksie.

Nobody wants a fight, but neither can we afford not to have one. See you on the picket line in early 2007.

...and bring your boot polish.:eek:

:E

Never has 'reap what you sow' been in sharper focus.

"Why should I go the extra mile when management won't move an inch" is becoming a constant refrain on FD's.

Its got to the point where even getting to the car park after work is a farce (how would you feel if, at the end of a 12 hour night shift, you were told to sit in your office for an hour before you could leave?) yet our management shrug their shoulders and tell us there is nothing they can do.

Fine. Get me some who can. I look forward to a new bunch after a combination of legal attacks on shady business practices, and, yes, a strike - because believe me we will do it.

I think it's the "fresh-faced MBAs" that have come into the airline that are part of the problem. The performance pay structure means that management get focussed on achieving their bonuses, quite frequently to the detriment of the wider interests of the airline because they are solely managing upward. It does not reward people who stand up for what is right or point out inconvenient issues.

Slightly off post but BikerMarks post was so to the point. The new engineering grade of Aircraft Maintenance Supervisor (AMS) which is being introduced to manage quality and airmanship standards will be a TMG grade and so will have pay and bonuses based on KRA's set by management.
Lets hope that they don't think like management as you have to live to retirement age to collect that pension.

Exactly.....and if you look at the T&C for Captains who would "want" to work as first officers after they turn 60...would make half the salary for 5 years as well.

How ridiculous of BA to think that their workforce will simply bend over this time.....:ugh:

'BARP must also be improved as a priority, as if you do not get the whole workforce on the same side, you will be stuffed. It is a desirory contribution from the company, which should be at least half the employees contribution up to the maximum permitted in a year dependent upon age.'

Bravo Re-Heat - I trust the BALPA BACC agree..............

sidthesexist

I absolutely agree. If there is no improvement in BARP, then it's a strike vote from me I'm afraid! I just hope some of my NAPS colleagues feel equally ashamed by their acceptance of BARP. If they don't, we're all screwed!

The pilots will strike. We can get jobs anywhere, management can't get the same deal they're on anywhere else. So, its a shame, but in this company, many are past caring if it goes down. And we will strike. :hmm:

Fortunately board members will be OK:

http://news.bbc.co.uk/1/hi/business/5319636.stm

There are early moves afoot by the Government, supported by many big businesses ,to change Section 67 of the Pensions Act to enable companies to change the terms and conditions of the amounts it has agreed to pay existing pensioners. Until now , once you started drawing a pension, the deal in force at that time,- eg inflation proofing etc,- had to be paid, so the pensioner was safe unless the company went under, at which point benefits could be frozen at the level paid at the time. Now is the time to start lobbying your MP and mobilising opposition to the next Brown grab.

BALPA held a General Members Meeting at LGW last night, LHR tonight. Industrial action cannot be far away now.

'The pilots will strike. We can get jobs anywhere'

So where are these 3200 pilot with 24 pay points up to 120K ?

Striking is the last thing you should do,i do know- i've done it.

If there isn't a sensible agreement, it's highly likely these jobs won't be with BA anyway, so we have nothing to lose.

We know, it comes just after the Ballot, which comes after a 'failure to agree', which comes after months of negotiating with the most bonus-obsessed, money-grabbing management in the history of the company.

There actually is a lot to lose. If BA were to go under the reduction in pensions people have already earned, never mind would earn in the future, could be severely diminished. Also as far as future employment is concerned, starting at the bottom of other people's seniority lists would not be much fun for those any distance up BA's. 747 Capt to F/O on a Dash 8 is not a small drop.
That raises other interesting questions about the future of the industry and whether seniority within one company is of overall benefit to the pilot community. It is pretty well the only labour group which has clung onto this log. It seriously undermines mobility between companies for any reason be it lifestyle, location, income, unhappiness with a particular employer or anything else which might crop up as people's needs and preferences change as they go through their career.

I can't honestly say that I give a stuff any more. They made a promise. They can afford a huge amount more than they're suggesting and they will either pay it or I'll watch them go under.

I wouldn't give them the satisfaction of employing me on peanuts.

BALPA have made BA a sensible offer (which should be palatable to the trustees). Willy Walsh keeps reiterating in the press that the Pensions situation should be sorted out soon. He is going to get egg on his face if this even goes to a ballot (as I am sure it will) as future bookings will be affected.

I personally don't think it will get to a strike - although I am very ready.

It's not about the company 'going under' - cos it won't (BA can afford to pay what we are conceding to). It's about common decency. Honouring contracts. Doing the right thing. But most of all keeping your employees loyal and onside. If that lot goes - then frankly I'll be better off working for someone else, whatever my juniority.

If we stick together (as we will) BA will take note. And so will other Airline managements. It will be for the common good.

I hope you're right. Some years ago I was part of a group which met WW to discuss issues of a similar nature. In the course of discussions he used a phrase which I have never forgotten: ''loyalty has no value''. It explained a lot. He does not think like you do. The things that are important to you are not important to him. If you understand this you will not be taken by surprise by what he does next.

I would venture to suggest that an airline manager who does not recognise the value of his pilots' loyalty is in the wrong job.

Stand up WW, LCG, PoD and CM (but thanks for all those lovely letters telling me how valued I am)!

Tooloose. Thanks for the info!
NN: Words are cheap, aren't they, especially when written in that kind of 'BA' way.

Exactly. "loyalty" or "employee morale". The beancounters have NO way of inserting a value to these items into their algorithms...no numerical value to airline 'managers'. Now....if they were 'leaders'....now that would be a different story. But, in the states at least, and as I suspect throughout the aviation world, they (managers) might "talk the talk", but they NEVER "walk the walk". The arrogance of airline managers is amazing. At AA, when questioned about their 100 million USD bonuses this year, they tell the employees that they "just don't understand management compensation". They also talk about their underpaid situation, and how they can go elsewhere for more $$. They 'need' those levels of compensation, or else a 'brain-drain' might occur. How laughable! AA's "pull together-win together" slogan is SUCH a farse. Based on stock price and forecasts, next year's management bonuses at AA will be 200 million USD. They have MORE than recovered from whatever "sacrifices" they made in 2003. Now it's our turn!!

This must surely be one of the longest running threads in the history of Pprune... with 47 pages of contributions rapidly I't's approaching its first anniversary...
Could the moderator possibly re-title the thread :

BA Pilots 'Very Thoroughly Prepared to strike'. ?

Oh dear; if people don't get down from a high-horse attitude on the debate, then I fear it shall be a company going under, exactly what Human Factor suggests - although I am sure he/she would never reallywant to experience that.

To be quite harsh, the market for executives is extremely healthy, as is the compensation that the talented ones can earn elsewhere. What do you think a director of a private-equity owned company earns? The answer exceeds seven figures when their equity interests are sold...

Coming back to reality: yes, WW's comment in such a manner is foolish in front of an employee; yes, the company has money; and yes, management appear overpaid. But how is it to invest in capital to keep the money coming in if it all goes to NAPS; and who from the workforce is standing up to volunteer to replace this "bad" management? If you guys and girls are so good, why are you not in there, changing the management style yourselves?

The fact is that there has to be some reality to this, beyond "give me what I was promised" - remember that you are in the same workforce that failed to prevent the implementation of the BARP with a 4% contribution from the company to a DC scheme to new joiners. Why should they stand up for your pension rights, which, if enforced, will entirely obliterate any chance of them having an improvement in their terms.

This "hard talk" of forcing the issue with a strike is counterproductive 70s tosh. Take a lesson in finance, and realistically work out what you can afford to take from the company (something I dearly hope your unions are doing), and learn that the airline requires more than the pilots to keep the whole operation flying.

P.S. - I tire of this "beancounters" comment. When the day arises that you equate petty management to bad management, and not the hardworking accounting workforce, I will rejoice.

Re-Heat, thanks for that. You cannot be expected to know all the issues as you are clearly not a BA BALPA member. As NAPS was being closed to new members, it is difficult to see how we could have prevented BARP. You can be assured that the BARP issue is being addressed by BALPA. BARPers will stand together with NAPSters as they know that unity will be vital for the next BA onslaught on our terms.

Sorry, but I view that as patronising, particulary the last bit after the comma. We are fighting our own battle, thanks. We are the most productive, cost-effective and 'on-side' employee group in the company. Why WW should choose to have his first falling-out with that group, I don't know. :cool:

No, I am not a member, however I am particularly well aware of the issues and the development of this in BA and BALPA. Particularly:
(a) the threat to strike if new recruits did not receive a final salary pension, which was not delivered, and,
(b) lack of action on the resulting low company contribution. I'm not entirely sure how you expect BARPers to support you, while their pension has been allowed to stand for so long?

I am afraid you read the patronising comment correctly - instigated by the particularly narrow-minded comment below :suspect::

A glass ceiling. No-one with any sort of drive or vision who doesn't conform to the "ideals" set by the higher echelons will ever get beyond the most humble Flight Manager. There is a somewhat eccentric assessment process which bears little relevance to actual management ability. You are seeing the results of this now. I know people who have been through the process, some of whom were successful, others not, and and I see little point attempting it myself. I don't believe that shafting employees is a sensible business practice, which I believe disqualifies me.

...and I stand absolutely by my comment, Re-heat. Why? Because I like to think I have principles.

Given some of the comments made in this thread, I can see why so few have made it up the management ranks. Most of the comments show a severe lack of knowledge of finance and operations and worse, all the bad mouthing of anyone and everyone (from management on down to accountants and actuaries) doesn't look very professional.

I would be surprised if there was a strike. This is just endless talk (a prep-rally of sorts). I also doubt the public will stand for yet another BA/BAA disruption, and certainly won't be sympathetic to well-paid (supposedly professional) workers striking because of changes to a pension plan, that will still be more generous than the plan of the average city worker.

"I would be surprised if there was a strike."


Prepare to be surprised very soon.

If the company aren't prepared to negotiate it will be soon.
The unions are all involved NOT just the pilots and BALPA.

I think you just might be surprised how much the (UK) public will stand. Although this thread is about BA pilots, just about every UK pension scheme has been robbed blind by Brown and Co and now many employers are jumping on the bandwagon, solely to improve their bottom line.

Whilst the specifics of this issue are a matter for BA employees only, the general issue of unilaterally changing deferred pay and conditions should be of concern to everyone, irrespective of whether BA pilots pension benefits are better than most.

These benefits have been earned and are a contractual obligation and we should all support any group fighting for their rights, be it pilot groups or any other elements of the aviation industry. Likewise this industry should support non aviation groups with their pension fights.

Unfortunately the green jealousy monster keeps rearing its ugly head, often from within and this is playing into ‘the enemies’ hands.

Whether it's jealousy or people gleefully watching our discomfort, BA pilots were never going to win hearts and minds. A shame really, because I have yet to meet such a cadre of hard working professional people, amongst whom I am privileged to number virtually all of my friends.

Not in that number are those who have chosen to betray their friends and join the management. I would consider myself to have sold my soul to the devil himself if I was to go across to the darkside. I loath the attitude of our senior managers, the naked avarice and the lack of contrition or humility as they lie to our faces.

Those outside are not expected to understand the pensions raid, let's face it, some of those who stand to lose most don't even understand themselves how much they will lose. For me that's the most immoral part of this whole thing, the 'little people' who don't have the knowledge to see through the spin, are also being swindled out of the futures they've earned after years of loyal service.

I'm sure many will see this as a right royal come-uppance for those snooty nosed superior bastards. I can assure you that this is just the beginning, if they were to win on this, then the terms and conditions for all at BA and indeed the rest of the industry will tumble into the abyss.

I can't describe how angry I am. I have to fight hard to prevent the red mist from interfering with my job. I could not live with myself if they were to get away with this.

Willy Walsh's warped nightmare of a Wallmart-BA is the end of the industry as we know it. If we strike to the ruin of the company, the result will be no different.

As much as I love this company, I will not shrink from strangling it to death to spare British society from this poisonous management 'ethic'.

Loyalty has no value - nice. We'll see.

"BA is a pension scheme with an airline attached"
 

"BA is a pension scheme with an airline attached"

This was a description on BBC Radio 4 this morning. I rather liked it but then I'm not a prespective BA pensioner, employee, or shareholder.

I heard that description applied to Nats by it`s current boss some months ago. It seems to be the fashionable statement made by those who would do away with, plunder or contain decent and fair ( and in Nats case, well funded and managed) pension schemes.

BA and the pension trustees have been made a fair an reasonable offer by a group of unions including BALPA. Unforunately Willie Walsh and his merry men have already published their wish list to plunder the pension fund and going back on that involves a certain loss of face.

So just for the avoidance of any doubt.....

BA Pilots Will Strike