BA union backs pay cut for pilots

http://news.bbc.co.uk/go/rss/-/1/hi/business/8106780.stm

Version 0 of 1.

Pilots at British Airways (BA) have been asked by their own trade union negotiators to accept a pay cut and work longer hours.

The British Airline Pilots' Association (Balpa) says in exchange the pilots may be given shares in the airline which they can sell after three years.

The aim is to save the struggling airline £26m a year in running costs.

Balpa officials are recommending the deal in a ballot to "help BA get through the current economic downturn."

Balpa General Secretary Jim McAuslan said it was a unique agreement, which would eventually give pilots a share of the wealth they created.

"We have always said that as a union, we would share the pain if our members shared in the gain," he said.

"Our research indicates that BA is facing a real business challenge and this is not the case of the employer crying wolf," he added.

Pilots currently earn between £24,000 and £110,00 a year, with an average of about £80,000.

Negotiations

BA has admitted it is in a "fight for survival" because of rising costs and a downturn in business caused by the world-wide recession.

Last week, it asked all its staff in the UK to volunteer to take up to one month's unpaid leave or work unpaid for that time.

The deal between Balpa and BA involves:

• a cut of 2.61% in basic pay

• a 20% cut in flying time allowances

• an increase in the annual number of hours worked

• and 78 voluntary redundancies but no compulsory redundancies.

In exchange the pilots will be given, from June 2011, shares worth £13m if certain "company targets" are met.

A BA spokesman explained that the targets for the share payout were "broad brush" financial and operational ones, which would be settled later for the year 2010/11, but hinged partly on the company returning to profitability.

He explained that the deal would operate like a bonus scheme, with fewer shares becoming available if the company did not do so well.

Pilots will be able to sell their shares after a further three years or keep them.

The union's ballot, which will end in July, will involve 3,040 members at BA.

The company has been in talks for several weeks with unions representing cabin crew and ground staff over cost savings plans, including 2,000 job cuts among cabin crew and 1,000 job cuts among administrative staff.