British Airways’ Creative Deal With Pilots

Filed Under: British Airways, Unions

It looks like the current dispute between British Airways’ pilots and management may be coming to an end…

British Airways’ ruthless employee negotiations

Airlines around the globe are suffering right now, and are having difficult conversations with labor groups, as redundancies loom. British Airways has made the most headlines for the ways in which management has negotiated with employee groups, as the company looks to reduce its workforce by around 12,000 people. In particular:

Those seemed to be British Airways’ opening offers, and the company has in the meantime done some negotiating.

British Airways is looking to reduce its workforce by 12,000 people

British Airways’ improved agreement with pilots

Head for Points reports on a tentative agreement between British Airways management and the union representing pilots (BALPA), which would greatly minimize the number of redundancies. The airline was initially looking at laying off about a quarter of its pilots (1,080 out of 4,300 total pilots), but that number has now been reduced.

This new agreement will see active pilots making significant concessions:

  • All pilots remaining at the company will take an 8% pay cut as of September 2020
  • All pilots remaining at the company will take an additional 8% pay cut between September 2020 and September 2022, which will go into a retention scheme (more on that below)
  • The 4% pay increase that pilots were supposed to get as of April 2021 will be delayed until January 2024
  • Pilots will have to take two weeks of unpaid leave between August 2020 and April 2021

In other words, pilots would be taking a 16% pay cut for some period of time, would be forgoing a 4% pay increase for a few years, and would have to take two weeks of unpaid leave. That’s a significant sacrifice, but seems fair enough in light of the situation. Furthermore, at least the pay cuts wouldn’t be permanent.

The big upside to this deal for pilots is that the number of redundancies would be reduced significantly:

  • Pilots will be offered voluntary redundancy, and while the hope is that 450 pilots would accept, it’s unlikely that will happen
  • Pilots who receive an involuntary redundancy will be placed in a priority return pool, whereby British Airways promises to give these people priority to return to the company for the next three years, before hiring from outside

Then there’s the most interesting part of this. British Airways is limiting redundancies here, meaning that the company will keep more pilots than it needs. The 8% of pay going into the retention scheme from active pilots will go to pay the roughly 300 pilots who will still be employed by the airline without actually flying.

These pilots will be receiving partial pay rather than full pay, but they’ll continue to be employed by the airline, and therefore will maintain their jobs in the future. As demand increases, they’d start flying again.

British Airways will keep more pilots than initially expected

Bottom line

From an outside perspective, British Airways’ tentative agreement with pilots seems fair. Pilots who stay on at the airline will be taking a fairly significant temporary pay cut, but some of that will be going towards keeping a pool of 300 pilots on the payroll without actually flying.

That seems like a win-win for the union and management — the union keeps more members (and more people keep their jobs), and management has a few hundred pilots ready to go once demand starts to recover.

What do you make of this tentative deal between British Airways management and pilots?

Comments
  1. I think it’s an unexpectedly positive outcome, especially with BA’s latest industrial relations’ prowess. It remains to be seen if the improved Cabin Crew offer is accepted by those on the older contracts. Judging by the few comments we’ve seen on FT, there’s not a lot of goodwill left in EF or WW fleets.

    But for the pilots, it’s an impressive deal, yes.

  2. I’m certainly not unhappy for the pilots but what about the fa’s? Did the pilots negotiate in solidarity with the flight attendants or did they make a side deal and wish them good luck with the giant pay cut?

  3. I think it’s not bad however are there any significant changes to their T&C’s? Not by the look of it. This is in contrast to how the rest of the workforce is being treated. Ground crew are being asked to sacrifice large salary and T&C’s changes that are permanent. All the time the airline is feathering its nest in terms of strategic acquisitions and its board members renumerations. Loyalty and respect has gone out the window. I fear for the future especially with the changes to an already tired, depleted and under invested engineering department. Read what you will into that.

  4. I think a lot more pilots will take advantage of the option of voluntary redundancies as BA can offer bespoke financial packages including other perks like retention of free or heavily subsidised flight options etc, with involuntary redundancy all the airline has to offer is the Governments mandatory package which is capped and they don’t have to offer any more benefits.

  5. Honestly, compared for example to the deals the Lufthansa Group has with some of their employees that see paycuts until 2023, this seems like a no-brainer. Sign it and be happy. I really wonder why BA is not more agressive, the pilots for the first time since years really have the worser negotiation position. I mean there is no market for airline pilots in Europe at least until 2025. Even the big three Middle East carriers are not hiring at all. We have seen much worser threats and treatment by IAG to its employees, so this is really astonishing in my eyes.

    Let’s see if the cabin crew is as lucky as the pilots.

  6. As usual sell all rest of the workforce always look after themselves .Has BA not realised the world is full of redundant pilots .

  7. I worked for Bea into British airways total 49 years and guess what early in the seventies the pilots wanted more and got more the rest of us got less so nothing changed but I am sure the future sort this out and let’s not forget flight crew cabin crew work app 6 months a year not bad

  8. This is good and it’s what unions should be doing, negotiating the best realistic option for their members. Unfortunately the situation at cabin crew is a different story with BA coming in with a horrific proposal. But the unions have refused to negotiate which is only making a bad situation worse and as such it looks like massive redundancies will be happening. It’s really bad for BA cabin crew who get the worst possible option due to the unions. Normally I support the unions but by refusing to at least attempt to negotiate with BA they achieve nothing and hurt their members even more.

  9. @Christian

    Pilots are represented by BALPA who were willing to negotiate with BA and get the best realistic deal for their members. Whereas Cabin crew are largely represented by Unite and GMB who have failed to negotiate with BA and have left their members with the worst possible option. I want to be clear I’m not on BA’s side here but if the unions and BA work together they can reach a favourable deal for BA employees. But GMB and Unite have not negotiated and have claimed the pathetic excuse of not being allowed to gather in person. They appear oblivious to the existence of Zoom. Unite and GMB have failed to stand up for their members and as such they’re now actively trying to hurt BA by attempting to convince the government to strip them of their slots which would result in yet more job losses at BA and before you know it we’re back to square one again. BALPA did its best and it shows. Unite and GMB failed and now cabin crew will be living on much reduced pay for a very long time.

  10. This is not the first time the BA is making such arrangements, intelligent crisis management techniques

  11. Just an FYI, but at the end of 2009, want to guess what BALPA and 94% of its BA flight crew members agreed to when BA were having cash issues? A 2.6% wage cut, zero hour contracts and less redundancies. The promised BA shares for its pilots in 2011 never materialised and wages remained stagnant until BALPA and its pilots had enough last year and finally went on strike. BA used the same “we’re burning through £XX million a day” back then too, but somehow landed on €9 billion in cash reserves just 10 years later..
    Now it’s 26%.
    Let’s see where BA/IAG are in another 10 years – cash on hand, cost of flights, cuts in the customer experience/service, and see where flight and cabin crew are salary wise.
    Well played Walsh and Señor. Well played.

    “We are satisfied that this step is necessary to help BA recover its position as one of the world’s most successful airlines”.
    Jim McAuslan BALPA general secretary. 2009…

  12. @Noah Bowie

    You are so right!

    The problem that BA Cabin Crew have always had is that they belong to the same union that the former “roster Clerks” or now IT staff belong to and who send FA’s on “all expenses paid free trips around the world to hand out the odd coffee and biscuit” I jest, heavily, in case no one has understood.

    This has always precipitated a situation whereby if the Cabin Crew have drastically changed working conditions (ie ULH flights and extended duty days) which the union begrudgingly negotiate deals for, then all the members jump on the band wagon and want the same new terms, conditions and pay, but their jobs structure doesn’t change whether they are administering a 737 LHR-CDG or a 380 LHR-HND.

    This has been so in Unite’s former personas of Transport and General Workers Union (the name gives away their goals)

    BALPA as you say represents only pilots, so any special working conditions that apply only to pilots can be negotiated, without impact on other staff.

    Why, oh why have the cabin crew not been successful in forming their own union, which categorically represents issues that are only pertinent to their working conditions and environment?

    As a further example, you would not expect administrative staff, working mainly 9-5 M-F to be paid extra if they were formerly a nurse, because in the event of an emergency, the services would be called, 999 in UK, and only basic first aid would be needed.

    Map that on to a severe heart case at 40,000ft and the former nurse has to perform life saving procedures, CPR, baby deliveries and in one notable case, even an operation on board, before the plane can land and be met by the emergency services, and hospitalisation.

    So far as I am aware, he or she does not receive any additional payment for the skill and training that is put to extreme use. But perhaps if they could negotiate separately, there would probably be a financial recognition. My point is, that is so many instances Cabin Crew have no backup. They have to deal with dire situations that rarely, if ever occur in ground based occupations.

    The above is largely rhetoricaly, I confess. But if there is anyone who knows of the real reason why there should not be a separate “BALPA” type union solely for FA’s, I’d be interested to hear.

    I am aware that it suits BA very well, and also gives the Union a few thousand extra members, so apart from their being strange bedfollows, or, who knows, buddies behind the scenes, I’m looking for a reason from the Cabin Crews point of view.

  13. I worked for BA for over 20 yrs ! You would be astonished by the behaviours that are demonstrated by both management and union ! BALPA have succeeded as they are both, realistic and in tune with the global outlook for aviation and needs of their members ! BASSA – think thuggish 1970s shop steward who is only interested in lathering their own palms ! The Reps earn huge amounts of money (some more than the skilled Pilots) and cherry pick their destinations. With most middle managers being ex grads with little experience they are easily intimidated ! Poor cabin do not stand a chance yet have absolute blind faith in their Union. V sad but it needs to happen as Unite/BASSA are v dubious ! The Cabin Crew role is relatively low skilled yet the legacy fleet members believe themselves to be worth as much as the Pilots ! BA crew must fall into line with market rates if the airline is to survive, £52k for a Steward who is recruited for their soft skills only and not academic qualifications such as Pilots, Doctors, and Nurses need cannot continue with the battle cry of being badly treated and that IAG are opportunistic, when most familiarise affected by COVID 19 are struggling on considerably less. It’s time to be real – Mr Beattie !

  14. The original deal put forward by BA was, I am told, much worse than the final deal. Maybe Unite should negotiate in a similar way to BALPA to get a better deal than the one on the table. I thought that’s what unions were for, to negotiate, not refuse to negotiate. What do their members pay for?

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