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The inside story on the BALPA / British Airways pay negotiations

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The BALPA pilot strike threat has been pushed down the news agenda this week because of the threatened (and then postponed) strike by UNITE members at Heathrow and yesterday’s IT meltdown.

A pilot strike is still a very real risk, however.

I spoke to a BA pilot yesterday who is up to date with the current negotiating position.  This is where things stand:

British Airways is claiming that it has no money, effectively, despite reporting impressive Q2 results and expecting another year of substantial profits, and despite finding a few pounds to take BALPA to court last week – and whilst this was not reported at the time, British Airways has been told by the court that it must pay BALPA’s legal costs as well as its own.

Progress at ACAS late last week and earlier this week was described as “minimal”

BALPA has agreed to another, potentially final, round of ACAS discussions which will start today (Thursday)  

Here are the current sticking points:

The current pay offer is not linked to RPI.  Whilst British Airways has sold this – and it was accepted by cabin crew – as an ‘above RPI’ offer, this is not guaranteed to be the case.  BALPA wants an RPI+ pay agreement.

BALPA is insisting on a profit share arrangement, similar to the one KLM recently introduced for its pilots.  Jet2 has also just awarded its pilots a bonus equivalent to 4-weeks pay.  The current bonus scheme, which has ten different triggers, is seen as one which is designed to stop payments being made.  BALPA would like a scheme based on a fixed percentage of profits.

The ‘gain share’ proposal on cost cutting, which has been accepted by cabin crew, is not acceptable.  (For what it’s worth, I agree.)  Employees do NOT share in the gains from cost cutting programmes – they only share in the additional gains over a random ‘base case’ figure put in place by management.  With no control over the ‘base case’ figure it is easy to see why this is not attractive.

BALPA has concerns over the governance of British Airways.  IAG, the parent company, refuses to get involved in negotiations because it claims that BA, Iberia etc have the freedom to operate at arms length.  BALPA believes that this is not the case and that the BA negotiating team is uncertain as to what it can agree without facing the wrath of IAG.

Let’s see what happens at ACAS today.

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Comments (160)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Adam says:

    I’m surprised Cabin crew accepted the offer and didn’t stick with the pilots in a joint claim, given they were hurt more with cut-backs/MF contract when BA needed “help” back then.

    Also find it strange they’ve not pulled the pin and set strike dates if BA are at this stage still pleading poverty.

  • Tracy McLaughlin says:

    Do the negotiations start today, any idea when when they’ll finish? I think most people just want to know what’s happening with their holiday either way. T🎈

  • Travel Strong says:

    Strike related Q: For Heathrow strike, is it known how long unite members will take to ‘consider and vote’ on the latest pay offer. Should we expect it to go all the way to the wire again?

  • Jake Mc says:

    Why do BA have to claim no money despite impressive profits?

    Have they ear marked the money for future investment or stated they will pay a particularly large dividend this year?

    How does “no money” fly with the union when the facts and figures state otherwise. There must be some reason for it as the union has stayed in discussions for this long…?

    • Anna says:

      They’ll certainly have less money after the latest IT fiasco. And I’m still waiting for my EU261!

    • Genghis says:

      Remember that profits do not equal cash.

      • Jake Mc says:

        True but after a number of good years you would have thought some of that profit could have been translated into cash!

        Also on a side note is it known what the union will accept?

        • Rob says:

          No. I think they assume they will know it when they see it.

        • Crafty says:

          Can’t comment on IAG but in some poorly governed businesses too much of the profit is returned to shareholders rather than reinvested in the business.

      • TGLoyalty says:

        And that A32x neos, A350’s and Club suites etc don’t come for free.

  • TripRep says:

    Surprised BA don’t incentivize more with free shares or a generous share save or share options scheme (with lock in agreements)

  • Chas says:

    If they want a deal linked to a share of the profits, are they also prepared to accept a deal linked to a share of any losses? The phrase “….cake and eat it” springs to mind….

    • Paul Hickey says:

      Agreed! Go work for KLM or JET2 then if you prefer their package. A job pays what a job pays. If you’re not happy with that then up skill yourself and move on. Strike action is a disgrace!
      I bet a lot of BA pilots have money invested elsewhere and would cringe at the thought of their returns being eastern up by “workers wanting more” when they have assumed risk with their own hard earned savings.

      • Paul says:

        “Strike action is a disgrace” – you’d make a good Tory minister!

        It’s a workers’ right in any democracy and if you don’t like striking then I believe there’s plenty of opportunity in North Korea.

        I believe Air Koryo is a good alternative for you and your precious holidays.

        • Paul Hickey says:

          To quote Lee

          “They earn up to £170,000 a year.

          In July, BA offered pilots a pay increase worth 11.5 percent over three years, which was accepted by Unite and GMB but rejected by Balpa.

          Sounds like they are simply being greedy.”

          You have 2 different mentalities at play . Employees vs stakeholders. Reading comments here it doesn’t take a genius to figure out “those who work for someone else for 40 hours a week and simply trade time for money” vs “those who trade blood, sweat and tears / risk everything to try and get ahead”….

        • Graeme says:

          You get fed in economy on Air Koryo….

    • Doug says:

      They took pay cuts back in 2009 to help the airline.

    • Jonathan says:

      I think the voluntary £10k pay cut post 9/11 (which they were told would be returned when back in profit) suggests that it’s not the pilots having their cake!

    • Ian says:

      That’s the point though – whenever BA have had profit warnings or problems in the past, pilots and crew have had to accept pay cuts and/or cuts in every other way. Even cutting free stuff for passengers for BOB is more work and unhappier customers to deal with for the same pay – some would even call that a cut.

      Now the company is making huge profits they should be paying a fair wage. Instead they would rather spend the money they could spend on a decent wage increase (or if they had even given a decent bonus based on the increase in profits before it even got this far) on fighting the unions and on court fees, legal teams and actually allowing the strike to happen.

      Yes shareholders and profit matter but don’t forget the “little people” who’s work helped earn these huge profits

      • Andrew says:

        And how would you define a “fair wage”? Personally I’d call any wage that’s already more generous than your competitors “fair”.

        I’m willing to bet that even with Jet2’s profit share scheme their pilots aren’t compensated as generously as BA’s.

    • DV says:

      That’s a very strange concept Chas. Many people are remunerated on the basis of a profit share, including Alex Cruz and Willie Walsh, but it would be very unusual for them to bear the losses. Why do you suggest this should apply to pilots?

    • Doug M says:

      What does the BA Head if IT earn? If he’s on performance related pay he must owe BA a fortune.

  • Simon says:

    Nerdy side point – wish they’d ask for cpi + rather than rpi +. Rpi needs to be killed off.

    • Thomas Howard says:

      Why is an index that excludes housing costs a better reflection of the “cost of living” than one that includes it? The RPI with a geometric mean would be better IMO but the purpose of moving to the CPI was to limit the increases in pension and benefit payments.

  • Mike says:

    If you are not happy with your job – go and get another job. Don’t expect to get paid more – just because you want to get paid more.

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