Shareholder anger at BA over strikes

Published on Tuesday 13 July 2010 14:58

British Airways fiercely defended its position in a dispute over pay and conditions to shareholders at a heated annual general meeting yesterday.

Members of BASSA, the cabin crew branch of trade union Unite, handed out letters to investors attending the AGM in London.

Some shareholders were sympathetic to the crews' cause, which has resulted in many days of strike action and an estimated loss of about 150 million to the airline.

But others were annoyed that the increasingly bitter dispute has not been sorted out yet, blaming in-fighting among Unite's leadership.

Cabin crew are being balloted on a new offer from BA which could signal the end of the disruption, although the issue of withdrawn staff travel concessions remains a sticking point.

One shareholder told the board: "The culture in BA isn't open. It is authoritarian. Management relies on bullying to get its way and the current dispute provides clear evidence of that."

Another shareholder said the dispute had caused "long-term damage" to the BA brand, while another asked how some staff had received 12.5 per cent bonuses "at a time when BA made the biggest loss in its history".

BA chairman Martin Broughton told shareholders: "The board's patience with BASSA has now been exhausted… We will win the right to manage."

Chief executive Willie Walsh said cost-saving measures such as reducing cabin crew on aircraft saved 42m in the last financial year and expects annual savings to amount to 62.5m.

"I don't do that to be popular, but to ensure BA is viable for the future. It's not nice to be depicted as Hitler or the devil but do I lose any sleep over it? Certainly not," Walsh told reporters.

Walsh believes the dispute will be resolved but the airline is training temporary staff so it can guarantee all long-haul flights and up to half of short-haul flights in the event of a strike.

BA attempted to reassure shareholders about future by being optimistic that Spanish airline Iberia will approve BA's 3.7 billion pension deficit recovery plan by late September, paving the way for a multi-billion-pound deal to create the world's third-biggest airline.

In May, BA posted a record 531m full-year loss due to industrial disputes, recession and winter snow.

It was the carrier's largest annual deficit since it was privatised in 1987 and follows a 401m loss last year.

Cabin crew have until 20 July to vote on BA's latest offer, which includes two years of guaranteed rises in basic salary from February 2011, in addition to annual incremental pay rises.