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British Airways Posts Improvements for July; Continues Negotiations with Unions

August 6, 2009 By: Jena Tesse Fox


British Airways is reporting an improvement in passenger volumes and fewer empty seats in July. Premium traffic continued to slide, however, as business passengers downsized to economy.

Revenues per kilometer rose by 1 percent during the month, the first gain since April, helped by a 3.5 percent gain in economy-class demand. Overall gains would have been stronger had premium traffic not continued its slide—down 11 percent in the month as business customers downsized to economy.

The airline is also reaping the rewards of capacity cuts, with the planes flying 84.6 percent full—a year-on-year improvement of 3.1 percent.

BA remains in a stand-off with its cabin crew over proposed pay cuts and changes to working conditions, but talks will resume today after a two-week cooling off period. Unions are demanding that the airline use managers with more seniority to negotiate proposed pay cuts and contract changes.

Unite, which represents 28,000 BA workers, regards the airline’s negotiating team as having insufficient power to strike a deal. Rumors have emerged suggesting that Willie Walsh, BA’s chief executive, will personally take over negotiations.

BA wants to cut 3,400 jobs and reduce the salaries and allowances of its cabin and ground crews. Unite proposed cuts, including salary reductions, but BA’s negotiators rejected them. Union members have threatened to take industrial action that could ground the airline this autumn if talks remain deadlocked and BA attempts to impose new terms.

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