Here’s the deal British Airways pilots have agreed to minimise redundancies

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Whilst British Airways cabin crew and the airline still seem some way apart in terms of agreeing a package of pay cuts and redundancies, BALPA – the British Airways pilots union – has agreed a deal with the airline.  This is now going out to members for a vote, with a recommendation that they accept.

It is an interesting package, and one which requires large sacrifices on behalf of those who remain to protect those who will not be flying.  It is not necessarily a model which can be copied by other parts of the airline, because pilots are on higher base salaries which gives them more room for manoeuvre.

If you remember from our earlier articles, British Airways was seeking to lose 1,255 of its 4,300 pilots.  It now looks as if compulsory redundancies could be as low as 200.

British Airways pilots agree pay cuts to save jobs

This is how it will work, according to a British Airways document sent to pilots which I have seen:

All pilots who remain will take a pay cut of 8%, effective from September 2020

All pilots who remain will take an ADDITIONAL pay cut of 8% (so a total of 16%) which will be paid into a Community Retention Scheme.  This pot will be used to pay the salaries of 300 pilots who will be grounded.  This pay cut will last from September 2020 to September 2022, with the amount reducing as flight numbers increase and more pilots are pulled back into the active fleet.

The 4% pay rise agreed for April 2021 will be deferred until January 2024

All pilots will take two weeks unpaid leave between August 2020 and April 2021

British Airways pilots agree pay cuts to save jobs

This is how the pilot numbers will be reduced:

All pilots have been offered voluntary redundancy.  They have until next Sunday to accept or reject.  I understand that around 250 pilots may accept.

If not enough pilots accept voluntary redundancy, additional staff will be selected for compulsory redundancy to reach the 450 permanent job cuts which I believe are required.  However, these pilots will be placed in a ‘Priority Return Pool’ and BA will not hire any pilots externally for three years without first approaching the members of the pool.

Of those who are not given voluntary redundancy or compulsory redundancy, 300 will be placed in the Community Retention Scheme.  These pilots will not fly – at all – but will continue to be paid a reduced salary, using money docked from the salaries of their colleagues.  These 300 pilots will be the first 300 people to be put back in the air as demand increases.

There are also opportunities for pilots to accept a part-time contract or to transfer to the RAF for a period.

The likelihood of being placed in the Community Retention Scheme will depend on the fleet type operated by that pilot.  No A350 or Boeing 787 pilots will be placed on the scheme.  Tenure will play a large part in deciding who goes into the Community Retention Scheme, so there is an element of ‘last in, first out’ at play.

Is this a good deal?

In the circumstances, this seems to be as good a deal as could be expected.  It is impressive to see that the remaining pilots have agreed to take a substantial pay cut in order to keep 300 of their colleagues on a salary, albeit grounded.  Pilots are also required to agree to changes in their working practices.

The deal works both ways, of course.  British Airways needs to keep a large group of trained pilots ready to fly as demand picks up.  The Community Retention Scheme means that the airline – at no cost to itself – will have 300 people on standby who it knows it can call on when required.

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Comments

  1. Bonglim says:

    Sounds like an excellent deal for BA – but given the environment that has to be expected.

    I would have liked to see swapping pay for equity based on a pre covid valuation; instead of direct pay cuts. But I’m probably way too optimistic.

  2. Mr(s) Entitled says:

    There is going to be a fight to get into that community retention pool.

    You only suffer an 8% paycut because you don’t face the additional 8% of your flying colleague. You are then paid for doing nothing, and small print dependent, the potential for a second income in the interim.

    This seems overly generous on behalf of those who remain. I suspect there must be more detail.

    • Kevin says:

      Not sure that would actually be the case that those in the pool will receive more than those who are not.

      However, I also suspect that even if this was the case that many would prefer this. All the reports on Twitter are clear that the pilots love being able to work. I’m sure they would rather be flying than sat at home doing nothing.

      • Mr(s) Entitled says:

        Who says you have to sit at home doing nothing? Go to uni, move abroad, get a ‘second’ job, renovated some property, spend time with the family, volunteer. All for the luxury of an 8% before tax cut.

        Again, seems overly generous if as reported.

        • Kevin says:

          Because most would want to do what they are qualified to do, and in most cases, deeply passionate about.

    • Philip says:

      Not quite as simple as that.

      Pilot’s income consists of basic salary PLUS sector pay.

      If a pilot isn’t flying, s/he will not earn the latter – which can be quite substantial.

    • I would have the 300 grounded pilots doing other jobs. Cabin crew, catering, baggage handling….
      There should be no such thing as free money IF you are able to work.

      • While BA make sweeping redundancies in every other department? There simply aren’t any alternative jobs to dish out.

        The “free money” is coming from their own colleagues, not from BA.

        • Journeying John says:

          “Free money” coming from the staff rather than BA….
          …much like “Flying start”, which is a great PR scheme funded by customers & staff!

      • Nothing in that comment made any sense.

      • Stuart Williams says:

        No, because cabin crew, baggage handling etc. are having their own problems, redundancies and pay cuts.

    • 2/3 salary for those in the pool, if they bid to accept any vacant fleet that becomes available.

      1/3 salary if they’re picky about where they go back to (eg avoiding shorthaul).

      Plus the 8% pay cut, and the loss of flight pay and allowances… but they’ll be free to get a second job (stacking shelves?!) while they wait.

      • Mr(s) Entitled says:

        This sounds far more likely. I think the article is off the mark. Needs more circumspection.

      • Nick_C says:

        Are many long haul Boeing pilots qualified to fly short haul Airbus flights?

    • Pilot Pete says:

      Pilots in The retention scheme will only get a max of 66% of salary.

  3. Philip says:

    “These pilots will not fly”

    “These 300 pilots will be the first 300 people to be put back in the air as demand increases”

    How will they retain their flying skills / type ratings / etc if they will not be flying?

    • Julian says:

      Presumably they won’t and will have to go through whatever process would normally apply for a pilot who has not been flying for year in order to regain their full qualifications……………

    • They can do the latter without actually taking commercial flights.

    • There are pilots in senior management positions at BA that retain their flight status by making minimal number of flights per year. Presumably those in the pool will be offered this.

  4. Marley says:

    I can’t imagine many organisations getting their staff to accept hefty pay cuts for the benefit of the employee group as a whole. I know there’s also a bit of self interest at play too but credit to the pilots for sharing the pain.

  5. Julian says:

    Can I assume that Alex Cruz and Willy Walsh will also be agreeing to take a 16% pay cut in order to lead the way by example with their flying colleagues?………………………….

    • Marcw says:

      They did take a considerable salary cut. Don’t know whether this is still the case. but remember, this people are still leading the airlines, taking decisions, chairing discussions,… They are, indeed, working. They aren’t sitting at home watching TV, holidays, refurbishing,… Like many pilots and cabin crew are.

      I think your comment is more motivated with your sentimental attachment with those leaders.

      • ChrisC says:

        Alex is certainly not leading the airline.

        He just does what Willie tells him to and will do what Luís tells him to when Willie finally retires.

        But senior management – even if they are still working – need to take significant salary cuts for as long as they expect other staff groups to take them. It might not be much in terms of BAs total salary bill but it is an important gesture.

      • Trevor Seymour says:

        They did not take a pay cut they supposedly were unpaid for 2 mths but when you earn what they do it us neither here nor there and they get share dividends and bonus payments that staff did not get.
        Staff were given a flight ticket( that you have to pay
        for) as a bonus that is only useful if you can afford another holiday or if you have holiday left to use.

    • Blenz101 says:

      They aren’t at risk of redundancy due to an unprecedented downturn in demand for flying.

      What would be more interesting is if this causes cabin crew unions to act in the interests of the community as a whole or seek to preserve the completely unfair two tier system which currently exists.

      • #premfcabincrew says:

        Blenz101, if you’re looking for some sort of redress re BA cabin crew (seemingly using the pilots offer as cover), then safe to say you are being both decidedly duplicitous and way off the mark. The two tier system you speak of is entirely of the Company’s making, not cabin crew’s. Also safe to say that if you took time to look at the Company’s initial proposal for cabin crew (and subsequent new proposals) you would see that the target was – and remains! – a particular core group of cabin crew employees that the current CEO of IAG did his utmost to remove from the equation during his tenure as CEO of BA (which lasted until 2011). Nothing is ever as black and white as your post seems to suggest.

        • The Unions were complicit in the 2 tier system. Unite has always played favourites. We remember the last financial crises where they put forward the proposal that BA stop flying from LGW and make those staff redundant without consulting with any of their members based at LGW.

          • #premfcabincrew says:

            Complicit? How so, Paul? Do you even know how Employment Law works and the limits imposed on Unions by virtue of it? You might even want to brush up on certain references, such as “Operation Columbus” or even “Leiden.” I believe several publicly available Court documents will better inform.

            The 2011 Agreement that was concluded between Unite and BA was with the Union having both its hands tied behind its back. Or is 2010 just a dim and distant memory? The decision had to be made to move forwards and accept what had been forced upon the cabin crew community, regroup and fight to get Union recognition for MF (hence why we now have MFU (Mixed Fleet Unite) – thanks, I believe, to the then CEO of BA, Keith Williams, and Len McCluskey of Unite).

            The fly in the ointment for some has been (and continues to be, as evidenced by the proposals recently put forward by the Company for its cabin crew community) the Ts & Cs and pay of the cabin crew community in employment prior to November, 2010.

            The issue with LGW in 2008 began long before and culminated in 2006 with the creation of SFG (Single Fleet Gatwick). When SFG started it was without a fully ratified MOA (Memorandum Of Agreement). Sadly there were far too many that were chomping at the bit that completely circumvented any leverage the Union may have been able to use to ensure the I’s were dotted and the T’s were crossed. The real nail in the coffin for me where LGW is concerned was when LGW cabin crew came out of the NSP (that had been ratified by all parties concerned) just as quickly as they went in (I believe it was only a matter of months – and this was after they had fought for years to become part of it).

            There is much history you appear to have chosen to gloss over, for whatever reason. But don’t believe for one second that the Union went running to the Company with some sort of Power Point presentation or suchlike with a view to undermining LGW cabin crew, or any other BA cabin crew i.e. Mixed Fleet. It’s that type of propaganda that has been the stock-in-trade for people that are more interested in making mischief than anything truly substantive. Much the same propaganda that would have some believe that today some cabin crew are simply being asked to take a 20% pay cut (all the while hoping, I imagine, that the public at large miss the strategically placed “Base pay” reference that this cut specifically applies to).

    • Betty Miller says:

      No but they expect cabin crew to take a 40-60% reduction. It’s disgusting.

      • Insider says:

        I thought they had said the maximum anyone would lose is 20%?

        If only Unite had actually negotiated with the company like the pilots, they might have actually got something acceptable..

        • Blenz101 says:

          It just seems to me that the pilots union have acted sensibly and negotiated to protect as many of their members as possible. The cabin crew unions on the other hand seem to be running a publicly campaign to smear the airline and refusing to engage at all. Those same unions have been previously instrumental in protecting those with packages which are now way out of line with market rate. Hence the two tier system rather than a harmonised set of T&C that most private companies aspire towards, BA are of course prevented from implementing this due to the militant unions and costs of industrial action.

          The reality is there isn’t a huge demand for those undertaking those roles and won’t be for potentially years to come. Negotiating the best for as many as possible would seem to be a sensible course of action.

          • #premfcabincrew says:

            There’s a tremendous amount that “Just seems,” Blenz101. The reality is decidedly more sobering (as is anything when one is actually on the coal face).

  6. Marcw says:

    Unless there’s a sudden U turn in some Government s in regards to covid-19 containment, the proposal is way too optimistic. We’re now living an illusion – it’s summer – so some people want to go in holidays to sunny Mediterranean. The problem is going to be the winter season. If borders don’t open, which doesn’t look like they will anytime soon… airlines around the world will essentially ground – again – their fleet. I expect a very tough and rough winter season.

    • ChrisW says:

      Agreed. If airlines can’t fill their planes in August they are going to have an awful Jan – March.

  7. There’s one very significant element to the deal that Rob only very briefly touched on but is also reducing significantly the number of redundancies. BALPA are encouraging (with BA’s blessing) the take-up of part time options, with a new 7/1 contract that’s proving incredibly popular as the tax implications means it doesn’t actually reduce take-home pay very much at all.

    The redundancy totals were based on full-time equivalents. If 1000 FT pilots take a PT option (which it looks as if they will), at least 125 will be ‘saved’ from redundancy (possibly more depending which particular option is taken up).

    • Agreed, that will probably have a much bigger impact than the (very poor) VR offer.

      Rob, the 250 figure quoted for potential VR actually refers to current expressions of interest for all voluntary measures – including part time, RAF, unpaid leave etc.

  8. Lady London says:

    Both sides got a win. Although I think BA got more.

    I would have no hesitation in a decent employer that I felt would continue longterm, in taking a salary cut of up to 20% to support ‘grounded’ colleagues in this way. I would want a guarantee that I personally would not be redundant lasting 3-4 years however.

    It’s a pity cabin crew salaries are so close to the minimum required to live, that there is not room for a similar arrangement to retain more, ground them and bring them back operationally as business picks up.

    Wonder what is the redundancy package for pilots?

    • Think of a number between “statutory minimum” and “statutory minimum + a tiny amount” 🙂

    • ChrisC says:

      Unfortunately many people think that BA is no longer (and hasn’t been for quite some time) a ‘decent’ employer that they can trust.

  9. Neil McDougall says:

    Also a number of captains maybe demoted because the majority of those on compulsory redundancy will be first officers. Hope not but if they do then that is a 45% pay cut.

    • Lol that’s ‘cause and effect’ of the LIFO element BALPA pushed so hard to keep… if you keep the oldest-serving first in a world where you have previously refused to accept DEP Captains, then you cause by default an imbalance in rank. They could have accepted an alternative that avoided potential demotions, but not only did they choose not to, they actually fought hard to make it that way.

  10. the_real_a says:

    Is this the first time that workplace redundancy consultation has actually worked?

    • Bagoly says:

      It’s true that it is rare, and good, to hear about an effort to spread the pain.
      It may not be precisely “fair”, but it’s seems more reasonable than just x% lose all income and the rest carry on as before.
      Probably only easy to do where:
      a) job is highly skilled so pay is starting high
      b) people can (within groups) be swapped between roles at short notice.

  11. Margaret Morrison says:

    What happens to pilots that had signed s contract to start in April, then didn’t? They have been in holding pool since December. They have also left good pilot jobs with other airlines.

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