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Why are British Airways pilots supporting the new low cost carrier at Gatwick?

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On Thursday we broke the story that British Airways was planning to launch a new low cost subsidiary at London Gatwick Airport.

The new carrier would replace the existing British Airways short-haul operation. At present, it isn’t clear if it will be branded ‘British Airways’ with standard BA service, or some variant of ‘British Airways’ (eg ‘BA Baby’) or something completely different (‘Cruz’?).

The letter sent to British Airways staff made it clear that staff terms and conditions were in the firing line. So why is BALPA, the BA pilot union, so keen?

BALPA issued a statement on Thursday which said:

“BALPA cautiously welcomes this decision to restart BA short haul operations at LGW and create a number of much needed new pilot jobs.

“BALPA and BA are in the final stages of negotiations over the revised pay and conditions for Gatwick based BA pilots and we hope to bring these talks to a conclusion shortly.”

This doesn’t sound like a union which is worried about its members getting shafted with degraded terms and conditions.

There is a good reason for this. They won’t be.

Based on discusions I have had with two BA pilots who are regular HfP readers, this is the current position:

  • the pilots will NOT be employed by the new low cost carrier – they will be employed by British Airways and seconded to the new airline
  • they will retain their position on the BA ‘seniority list’, the hugely complex internal pilot ranking system which decides which pilots get to choose the flights they want and who ends up with the remnants
  • terms and conditions will be generally unchanged, apart from necessary changes to reflect the seasonality of the Gatwick operation (ie fewer hours in Winter, potentially resulting in lower overall pay than they received at Heathrow)
  • pilots will have some sort of priority for short haul jobs which come up at Heathrow

I understand that jobs will be offered first to existing British Airways short-haul pilots who wish to move from Heathrow for some reason.

If more are required, new jobs will be offered to those who were made redundant last year and those on the Community Retention Scheme. This pool contains 300 pilots who are not flying but who continue to be paid – not by BA but via a salary deduction from those who are in the air.

These are, I should stress, still proposals at this point with no final agreement made with the airline.

The risk, of course, is that by supporting the launch of this new airline, BALPA is setting in train a series of events which will negatively impact all of its members. At some point British Airways will start hiring new pilots for the low cost carrier for less than it is paying at Heathrow, and the airline may eventually find an excuse to impose the same terms on existing pilots.

British Airways Gatwick Airport new low cost carrier

If pilot costs are not coming down, what is left?

You would, at this point, be forgiven for wondering exactly what costs are going to be cut to make this new carrier even leaner than the old Gatwick operation.

There is minimal movement possible in fleet, fuel and landing costs. BA’s distribution system is an existing fixed cost, unless it adds cost by launching a new brand and website. Ground staff at Gatwick were already outsourced. Pilot salaries are not going to change, unless hours change, because they will be secondees from mainline BA.

You could look at cabin crew costs, but pre-covid Gatwick crew were already paid less than their Heathrow colleagues. Realistically there is very little to cut here. Staff travel and other flying perks have a low cash cost to fulfill.

If the British Airways brand is retained, it is likely that Club Europe, lounges, free snacks and water, Avios, checked through baggage, elite benefits etc will need to remain too. This adds cost.

If a new brand is introduced, costs can be lower (no Avios, no lounges, no snacks, no connecting baggage, no elite benefits) but ticket sales and / or average fares will also be lower. People who would have flown BA are likely to choose easyJet over a new IAG airline with an unknown name.

Lufthansa has tried doing something similar with Eurowings. It has been a financial disaster. Iberia Express is, admittedly, doing better but it doesn’t face the same level of competition as ‘BA Express’ would face at Gatwick from easyJet, Wizz Air and Ryanair.

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Comments (86)

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

  • Tim says:

    It seems pretty obvious to me: BA should just dump Gatwick and set Manchester as their second base. Larger catchment area for direct flights. Same airport group. Good for public relations. Easier to negotiate terms with employees (but you’ll need to relocate t’ North…)…Simple. You’re welcome Sean 🙂

    • ChrisC says:

      What do you mean ‘same airport group’

      Manchester Airport Holdings has nothing to do with LGW

      • Matthew says:

        I think Tim is getting mixed up with STN which is owned by MAG along with MAN and EMA.

  • Matarredondaaa says:

    Prior to the pandemic BA to/from Malaga were more than competitive with easyJet and Norwegian
    Major difference was they were not maximising income from food, etc and sustaining stupid costs with a handful travelling in the front cabin being treated like kings with two staff members looking after 6 or so people plus lounge costs, etc.
    BA need to be bold by doing away with the front cabin and all the associated costs, increasing the capacity of the aircraft, getting cabin crews to push food and drink sales like easyJet, etc.
    The vast majority of travellers use an airline based on the flight cost.
    Easyjet’s cost base is around mid way between BA and Ryanair/WizzAir and if BA can get down to EasyJet they will make a success of Gatwick.

    • patrick C says:

      For vacation flights from Gatwick maybe, but personally I specifically avoid any LCC. From the non existing service to the annoyance from the booking to the arrival at the destination, some people are willing to pay for it to some extend .
      I would have thought that BA finally learned that you cannot compete with a pure LCC on price, and trying to do it destroys the brand value even if it is under a slightly different brand name. (Eurowings is still linked to lufthansa by customers)
      The only strategy is not to compete on max capacity, but on service and quality and charge for it. The operations need to run efficiently though.

      • JDB says:

        I agree. I have zero interest in flying easyJet or Ryanair; that is not a holiday experience we want, having tried it in the distant past. We are more than happy to pay to be just that bit more comfortable at each stage of the journey and I don’t think we are alone. It may be partly an age thing!

        • Bonglim says:

          I’m with JDB – I would be happier to pay extra for a better service. I pay extra for the empty middle seat, the time in the lounge and less arguments about luggage being 2cm bigger than it should.

          But I don’t think I am in the majority here. I don’t have kids, travel as a couple, and between us earn enough money to spend on things that others would consider frivolous.

          I’d love there to be an airline which charged loads, but had proper luxury for European flights, just don’t think it is economical for any airline to deliver it.

          • Anna says:

            After a fair bit of experience of both, I can state categorically that direct with a LCC beats BA via LHR on short haul!

    • ChrisC says:

      On every SH flight I’ve been on as soon as the meal and first round of drinks has been served in CE the junior member of cabin crew has been sent down the back to help with BoB or collecting rubbish etc before coming back to the front to assist again.

      And there could be more people in economy that had lounge access than there were passengers in Club who it can be argued paid for their lounge access via their ticket price.

      The BA crew who I know wanted to try and flog as much as they could for the minimal commission but the carts were often poorly loaded with things like sandwiches in short supply. You can’t sell what’s not there and BA and Tourvest messed up with BOB by not having adequate stocks.

    • ADS says:

      “getting cabin crews to push food and drink sales like easyJet”

      The difference in culture is huge.

      I regularly fly 1 hour sectors where Ryanair staff complete a full round of food & drink sales, a few lottery sales, and a full round of perfume sales.

      On the same sector, the BA staff used to manage to offer food & drink purchases to about half the plane.

      The BA “polite” culture just doesn’t work for these sectors.

  • Anonymous says:

    The new airline at Gatwick will use a few existing pilots for a fixed period but new recruits will be paid an inferior salary . All pilots will be on a just above legal scheduling agreement. Pilots will be on the seniority list at BA but are likely to burnout after their fixed period (5+ years) at Gatwick store being allowed to request to move on.

    BA pilots should beware. This is the virus that will quickly spread to other fleets if voted through. the new airline will be unencumbered by BA debt, will be able to negotiate its own catering/handling/engineering contracts. It may well look like BA on the outside but what happens under the skin will look and feel very different.

    Why BA want to dip their toes again into a pool where it has already failed, who knows. If I want a cheap seat and a friendly smile, I travel Easyjet. If I want a bit more, I dig deeper and go with BA. But I refuse to support a new start up that are ruining BAs good name, cheapening it’s brand and exploiting its staff. BA are fast losing the faith and trust of its loyal customer base with excessive cancellations at all 3 of its bases.

    This is not about covid. This has been in the planning for years, and hey, why waste an opportunity to kick a workforce while they are down. a generate the vast majority of the profit at IAG, but with lower paid staff, they can go further.

    Easyjet won’t lose any sleep over a new start up with 10+ aircraft and a workforce who are there through desperation, not through choice.
    Shame on BA. Go back to what you do best, and strive to do it even better

    • Mikeact says:

      ‘BA are fast losing the faith and trust of its loyal customer base with excessive cancellations’

      What Tosh…you guys have been saying this for years….Covid has not helped at all, but BA’s passenger numbers have steadily increased year on year.

      • Rob says:

        This is against a rapidly growing aviation market. Would be interesting to see BA’s market share over the last 20 years.

  • Sunny smith says:

    BALPA is incompetent- professional pilots pretending to be professional industrial negotiators. In reality, a bunch of amateurs negotiators against the might of big business and their -actual- professional lawyers.

  • Joe says:

    My 2p of thoughts is that BA’s best bet for LGW going forward is to launch a new subsidiary with reduced service on a par with easyjet etc but still offer tier points and avios (perhaps at a lower level than regular BA flights) as a differentiator. It wouldn’t cost much but would probably be enough to swing enough customers their direction to keep planes full.

  • Dev says:

    BALPA are a joke! Who remembers them cancelling a strike 9 days out as “someone had to take the initiative…”

    they had the capability to cause management a real bloody nose and fight for T&Cs but caved in!

    • Dev says:

      The only negotiating tactic the Union has is to withdraw labour … and they chose not to do that! BA management probably could not believe their luck!

    • Rob says:

      Hard to imagine how they kept any credibility after that. Organise a strike unless BA changes its position, BA does not change its position and makes it quite clear that nothing will make it do so, BALPA cancels strike.

      • ChrisC says:

        It did cost BA a shed load of money in compensation for cancelled flights and paying other airlines to carry BA passengers.

  • A loyal fan of BA says:

    Unless I am very much mistaken, BA already have a subsidiary at London City Airport, BA Cityflyer. I travelled with them on Friday evening and choose to travel with them whenever I can, both to avoid the chaos at Heathrow, but also because the service is lovely. They still offer complementary food in both Business and Economy class. The flight attendants on my flight on Friday evening were talking about the new airline and are worried it would be bad news for the flying staff at BACityflyer, who are already paid substantially lower wages than their BA counterparts. They are being threatened with paycuts and layoffs already for this Winter, yet It is their “big boss” who is setting up the new airline, which makes me wonder what the motivation is behind a brand new brand when he already has one that works so well. It doesn’t feel like a very clever move that’s for sure.
    Why do BA need another subsidiary when they already have a cost-low airline who “do the BA brand” very well?
    New start ups are risky and could damage the BA brand if they look and feel too far from what BA do so well. You only get one opportunity to get this right and as a loyal customer I think this feels very wrong.

    • Memesweeper says:

      City flyer have the wrong aircraft type for Gatwick, otherwise an expansion of their operations would be a good fit I’d have thought.

    • Joe says:

      City flyer is not an LCC – their flights are often more expensive than equivalents from LHR!

      • speedy says:

        they are not a LCC but since the collapse of Flybe, BMI regional and Stobart, their pilots and cabin crew are amongst the lowest paid in the country. Their main offices are based far from London and they have skeleton everything. you have Lo cost mentality towards staff with a BA tail plane, a free floppy sandwich and a BA price tag for passengers. I’d say it’s a goldmine for BA

      • John says:

        Part of it is increased charges at LCY compared to LHR

      • marcw says:

        LCC doesn´t necessarily mean LOW FARES.

      • David says:

        No “free” lounge either ☹️

  • Kevin D says:

    So BA are setting up a low cost carrier. This is just a cost cutting exercise for a portion of the business. And I don’t think, no matter what they call it, they will be able to cut enough costs to make money. It could harm the BA brand too. I would love to see it work, but Ryanair and Easyjet have to run a pretty slick set up through out all parts of their business to make money, and ultimately, that’s what it’s all about.

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