British Airways has asked its 40,000 staff to work without pay for up to a month as the ailing airline seeks to cut costs.
The group, which made a record £401 million loss in 2008 amid surging fuel prices and a collapse in premium-fare passengers, is seeking to reduce costs dramatically and has already offered staff unpaid leave or a reduction in hours.
Willie Walsh, BA’s chief executive, has now gone a step further by asking staff to volunteer for between one and four weeks of unpaid work in what he says is a “fight for survival.” Mr Walsh, who said last week that he would work for free in July, has set a deadline of June 24 for employees to volunteer for unpaid work. He said that the salary deductions would be spread over three to six months wherever possible. BA denied that those staff who volunteered for unpaid work would be given preference if the airline imposes a further round of redundancies.
The airline is currently negotiating pay deals and job reductions with its ground handling staff, pilots and cabin crew, who have been told that the airline needs to settle discussions by the end of the month. In total, BA is thought to be seeking as many as 4,000 job cuts, including 2,000 voluntary redundancies among the 14,000 cabin crew. Mr Walsh wrote: “I am looking for every single part of the company to take part in some way. It really counts. We face a fight for survival. These are the toughest trading conditions we have ever seen and there simply are no green shoots.
“Our survival depends on everyone contributing to changes that permanently remove costs from every part of the business,” he added.
It’s one thing for the CEO to work for free, he can well afford it. But the “grunts” among us who have been asked to take substantial pay reductions… can sympathize.
Thanks to Ian Warner
Typical BA stuff, they have pretty terrible employee relations.
The exec in question gets a basic salary of £743,000.
Some cabin crew work for a basic salary of £11,000.
So BA- when you are back in profit and making lots of money, will you start offering employees extra money in return ?
I’m thinking about my safety. I wouldn’t fly on any plane were the staff aren’t getting paid.
Ask British Airways shareholders to go without a dividend check for one month.
It never ceases to amaze me the number of people that only read the headline. Read the effen article people!!! You might learn something.
Even still, the resident trolls, such as Cow-Patty and ‘dro will continue with their trolling, BUT, there is no excuse for the rest of the people.
HINT, BA currently pays as much as twice the salaries that competing airlines pay. The shareholders aren’t being paid. etc.
As far as legalities, these are voluntary moves. If you are salaried employee hours don’t count, it’s getting the job done, which may take 80 hours a week. For some this may be doable, but those living on the edge would be in deep crap. I guess you could ask the mortgage lenders and other creditors to skip a payment. I seriously doubt that could be arranged. What’s the choice, picking up your card and going on the the dole?
http://uk.finance.yahoo.com/q?s=BAY.L
British Airways shareholders are doing VERY well, currently at 132.50 down a mere -4.10 with a dividend and yield of 3.66% which is better than most banks these day.
They can sacrifice a bit too to save their own greedy arses.
Also, it appears that the 132.50 is in UK POUNDS STERLING at the Yahoo stock quote site.
In US DOLLARS that would be $215.91/share. Yeah, I’d say shareholders are doing VERY WELL. Let them sacrifice too if they’re really interested in saving the company. But they won’t, they’ll milk the company until it’s dead and then blame the workers. Same pattern over and over.
Hmmmmm, take a 8.33% pay-cut to help others at BA and you will never get it back, but management CERTAINLY will from your generosity.
8.33% pay cut? Okay, then 20 non-paid days off through the year, in addition to paid vacation days. “Oh, you want us to WORK for the 8.33% less? Uh, no.”
#27, Miss X2B,
So what is your point? Over the past month the shares have fallen from 168 P to 133 currently, in a steady decline.
There was nothing at your link saying the shareholders were getting dividends. My understanding is they are not.
#30, Mr. Fusion. Look again, it’s there. The steady decline could be caused by anything, and no doubt asking employees to work for free is not going to stop that decline in fact, it might accelerate it.
#5, lol, what a piece you’ve got there.
Wealth is invented? No, wealth is created through production. This wealth can then be used to consume and support further production.
The market is fair? Who says that? The market attempts to achieve allocative efficiency. Fairness in the allocation result has nothing to do with it.
#30, Mr. Fusion, I do in fact find that while last year BA did pay a dividend, they made huge profits, this year the dividend was suspended because of what they claim are losses. But every airline is in the same boat as is every business. There are losses, it’s a recession/depression going on worldwide so it’s understandable for the loss. Lay off the employees if you must so they can collect benefits but asking them to work for free is a scam on the workers and the government too. Or as I said earlier, just let the shareholders give something back for a change.
#19, Cap’n, There has been a fairly significant amount of work done surrounding the Insider-Outsider Theory, and is fairly well illustrated your anecdote.
A good read (somewhat lengthy, but nothing too difficult) concerning it can be found here:
http://ideas.repec.org/p/iza/izadps/dp534.html
#31, Miss,
It appears Cow-Patty, Lyin’ Mike and Alphie aren’t the only ones with reading comprehension problems.
Ex-Dividend Date: 28-May-08
And that was back when the shares were worth considerably more than today.
Actually, back in May, 2008, BA was already trying to cut benefits to their workers, they wanted to not pay out dividends to their retirement accounts meanwhile, dividends were still being paid to the regular shareholders. What they tried to pull was illegal under UK law. In the end they had to pay out dividends in May, 2008. For 2009, that’s when they recently decided to suspend dividends. No doubt trying to figure out another way to rob from the workers. British Telecom tried to pull the same stunt, pay dividends to shareholders and not to pension retirement accounts and they too were warned that this was illegal. Steal from the poor to give to the rich, business as usual.
The Wright brothers didn’t do it for the money.