British Airways' plan to reap £1 billion a year in efficiency savings by March 2000 could suffer a severe blow if two separate ballots of cabin crew and ground staff, the latter over the airline's plan to sell its catering operations, result in support for strike action.

Both ballots are being organised by Bassa, a unit of the Transport and General Workers Union - the carrier's largest cabin crew union - in response to BA's alleged refusal to negotiate over new terms and conditions for cabin crew and the outsourcing of its catering business.

In early May BA signed an agreement with its smaller Cabin Crew '89 union, rejecting negotiations over the TGWU proposals out of hand, claims Ryde. Ryde goes on to explain that the airline is contractually bound to negotiate with the union prior to the outsourcing of any of its activities, and that its failure to do so would create a worrying precedent. 'If we do not negotiate it gives us little to say about contracting out.'

With the results of both ballots due at the end of June, Ryde was confident that staff would vote for industrial action, forcing the company back to the negotiating table. Despite the fact that Bassa represents over 90 per cent of the mainline carrier's cabin crew, BA claimed it could continue flying in the event of industrial action.

But BA's chief executive, Bob Ayling, is clearly banking on both cabin crew and ground staff rejecting strike action. 'I do not believe the employees of BA are in the mood to take industrial action,' he says. In May the airline announced net profits of £548 million ($896 million) for the year to 31 March 1997 and a profit share for employees equal to 3.3 weeks' basic pay. Ayling adds that the TGWU 'boycotted' the discussions and later tabled unacceptable proposals.'The TGWU has in that sense missed the bus.'

The ballots could scupper the agreements already signed so far this year with BA ground staff and cargo employees as part of a parcel of measures which, together with improved yield, represent some £200 million ($327 million) in current savings, and are expected to provide £600 million of the £1 billion by 2000.

Other measures include the rationalisation of the airline's revenue accounting through the transfer of jobs overseas, and the creation of a new global accounting centre near London in 1998; proposals - out for a consultative ballot with unions - for pay cuts with cushion payments at British Airways Regional; the closure of British Airways Contract Handling for other airlines at Heathrow in March; the sale of two overhaul units in BA engineering and the outsourcing of its IT systems; and the outsourcing of vehicle management and maintenance services to Ryder.

The deals with both Cabin Crew '89 and ground staff - signed back in March - include lower starter rates for new recruits. But while ground staff have decided to accept a two year pay freeze, the Cabin Crew '89 agreement increases basic pensionable pay by about 18 per cent for existing employees in exchange for more flexible working practices. New recruits face starter rates that are probably 'near to 25 per cent less', says a BA source.

So far BA's agreement with its cargo staff has not been challenged. In early May three quarters of its cargo staff voted to accept a two-year pay freeze, capped at 3 per cent company wide, and a reduction of almost 400 jobs over the next two years as automation increases.


Source: Airline Business