British Airways stands firm over crew dispute

LONDON Tue Jul 13, 2010 3:53pm BST

A striker holds a Unite union banner at a rally in Hyde Park, central London May 28, 2010. REUTERS/Stefan Wermuth

A striker holds a Unite union banner at a rally in Hyde Park, central London May 28, 2010.

Credit: Reuters/Stefan Wermuth

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LONDON (Reuters) - British Airways fiercely defended its position in a dispute over pay and conditions to shareholders at its annual general meeting on Tuesday.

"The board's patience with BASSA has now been exhausted (...) We will win the right to manage," Chairman Martin Broughton told shareholders, referring to a long-running dispute by members of BASSA, the cabin crew branch of trade union Unite.

The Unite union, which represents 90 percent of BA's 12,000 cabin crew, handed out letters to shareholders on their way to the AGM on Tuesday, asking them to stop the dispute which has cost the company 150 million pounds.

Some shareholders heckled BA management at the AGM, accusing the company of "feathering its own nest at the expense of shareholders," and questioning whether chief executive Willie Walsh should move on.

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

"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.

REASSURANCE

BA management attempted to reassure shareholders about the company's future by being optimistic that Spanish airline Iberia will approve BA's 3.7 billion pound pension deficit recovery plan by late September, paving the way for a planned 8 billion euro deal to create the world's third-biggest airline.

If shareholders approve the plan in November, the merger could be completed by the end of the year, Broughton said.

International Airlines Group, the new holding company, will be Spanish registered with its primary listing on the London Stock Exchange and a UK head office.

BA's trading environment remains harsh but is showing improvement from last year's depressed levels, Broughton said.

The company is aiming for a 6 percent revenue growth and to break even at the pretax level this year.

In May, BA posted a record 531 million pound full-year loss due to industrial disputes, recession and winter snow. It was BA's largest annual deficit since it was privatised in 1987 and follows a 401 million pound loss last year.

The current industrial dispute started when BA decided last November to cut cabin crew pay and reduce staffing levels on flights to save 62.5 million pounds a year.

Cabin crew have until July 20 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.

However, a sticking point in talks between the airline and Unite has been BA's removal of travel perks from striking staff.

(Reporting by Nina Chestney; Editing by Samia Nakhoul)

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