EXCLUSIVE: Possible British Airways industrial unrest on the way as unions demand a 5% pay rise

It has been a while since we’ve seen any industrial unrest at British Airways, so the more cynical amongst you will be thinking that we must be due a strike threat soon.  And here we are.

The three main trade unions representing British Airways staff – BALPA, Unite and GMB – have come together to submit a joint pay claim for 2019-21.  This covers all employees, not just cabin crew.

The immediate demand is for a rise of 5% from 1st January (or 1.75% above RPI if higher – RPI is currently 3.3%).  This is to be followed by a rise of RPI + 1.5% from 1st January 2020 and RPI + 1.25% from 1st January 2021.  In addition, unions want 7% of annual operating profit to be ringfenced for staff bonuses.

Whilst this may sound aggressive, base pay for a new Mixed Fleet cabin crew member is currently, I believe, £13,079.  Allowances bring this up to what unions claim is an average of around £16,000.  BA claims the average is higher at around £21,000, with the difference apparently based on ‘typical’ versus ‘actual’ rostering patterns and fleet-wide bonus payments which the individual cannot control.

Let’s be honest, this pay claim process is unlikely to end well.  Here is the letter circulated to BALPA, GMB and Unite members this week:

Dear Member

Traditionally, around this time of year, the trade unions submit their separate pay claims for their areas. 2019 will be different. The trade unions want to ensure that their members get a share in the success of our employer. Therefore, the trade unions have submitted a joint claim. One claim on behalf of everyone.

Giving our membership a play by play account of negotiations is impossible but in line with our continued efforts to be as open as possible the full claim is set out below. The claim content is based heavily on your feedback in the pay survey conducted at the start of Summer 18 and focusses on:

an above RPI pay rise,

enhanced profit-sharing arrangements, and

the introduction of a sharesave scheme.   

Background to the claim

The BA Q3 operating profit margin of 20.1% (adjusted to take into account exceptional items), far exceeded that achieved by many rival companies, most notably United, Delta, and Norwegian. Based on the key measure used by investors, return on invested capital, BA delivered another excellent result with a ROIC of 16.7%.

BA staff have, for decades, made many sacrifices along the road to where BA is now. Most notably, accepting changed contracts and concessions to contracts old and new, and taking pay cuts to help the company in the face of challenges in the past. Only this year, BA staff who were members of NAPS reluctantly agreed that its costs were unsustainable and that it needed to close to future accrual.

BA’s trade unions have displayed leadership and restraint, always recognising and understanding the need for our employer to deliver strong financial results to enable it to flourish and grow the business.

We firmly believe BA can afford real pay awards materially above inflation.

Details of the claim

The joint unions are therefore seeking to agree the following increases: RPI+1.75% (or 5% if higher) from 1-Jan-19; RPI+1.5% from 1-Jan-20 and RPI+1.25% from 1-Jan-21.

We also believe BA is able to give staff a much larger share in the success of the business, aligning the interests of the company, its shareholders and staff. To achieve this aim, the joint unions are seeking to agree (i) an enhanced, all-employee profit-sharing scheme based on a pot equivalent to 7% of BA’s annual operating profit per year and (ii) the introduction of a voluntary sharesave scheme.

Re-engaging

To deliver the best experience to our customers, we believe BA need their staff engaged. An airline without its pilots is not an airline.

BA has failed to match best practice in recent years by making all-employee awards that in no way match the success of the company itself. This cannot be justified and leads to a fundamental disconnect between the company and its pilots. In our own benchmarking, we know that KLM and Lufthansa both ensure that pilot contracts reflect the success of the company through generous bonus schemes.

Additionally, we know that other airlines continue to offer share schemes. More progressive companies realise such schemes are popular with staff and invaluable in terms of getting staff to identify with the performance of the company.

A CC view

For reps, basic business is getting harder to progress within BA. We believe there are cultural issues in the BA/IAG leadership structure which are not in the long-term interests of our airline. There is so much pressure on resourcing and cost focus now that it is has become increasingly difficult to resolve straightforward, day-to-day matters (for example, dependency leave). This misguided approach is not likely to help BA resolve much bigger issues such as company-wide pay negotiations. A focus on cost-cutting alone, with little or no emphasis on value for money, means increased fatigue, little in the way of staff development, less retention and decreasing job satisfaction.

Job satisfaction and the prestige of working for British Airways is at a low, evident through widespread disengagement. Our recent pay survey showed one consistent response, highlighting that the small bonus did not engender any feeling of value or worth and was generally regarded as “insulting”.

The BACC wants to address these matters. This won’t happen overnight, but BA engaging meaningfully with us during this pay claim will be an essential step for pilots and the company. A collaborative approach is still the BACC’s goal. As we enter another hectic year and ambitious network plan we hope that British Airways and the leadership team recognise this, despite our concerns. We hope managers can facilitate pay negotiations which allow our reward to be aligned with the success of this company. The CC and the other unions believe these changes are entirely affordable and justified.

Finally, reps and members need to work together. We appreciate your patience and recognition that there are times when things will appear too quiet. In recent years negotiations have been plagued by rumours and members working against each other, not with each other. The new CC commits being open and honest with our members at every possible opportunity. In return, we ask that you do not accept rumour as fact. Do not fall into the negativity that can be online social platforms. Instead, come and meet us. Support us. Please email us to bust myths so that we can help you to help each other.

Next steps

The next joint union meeting with the company will take place in December.

Regards

BACC and Pay Team

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