British Airways scrapped almost all of its timetable for the next two days as pilots went on strike for the first time in decades in a labor dispute that could cost the carrier 80 million pounds ($98 million).
The unit of IAG SA had “no option” but to cancel almost 100% of services amid the action over pay, it said in an email Monday, amounting to more than 1,600 departures and arrivals. The British Airline Pilots’ Association union has called for another strike on Sept. 27. The shares dropped as much as 3.1%.
British Airways unit chief Alex Cruz told the BBC that the pilots had been offered a deal that would have lifted remuneration 11.5% to 202,000 pounds, including benefits, making them among the best paid air crew in the world.
Balpa General Secretary Brian Strutton said he didn’t recognize the figures and that most of the union’s members at BA will earn a lot less. The pilots are seeking “a share of the record profits just as they shared the pain in the bad times,” he added.
The disruption hit hardest in London, where BA operates from its twin hubs at Heathrow and Gatwick. The outages will extend to other locales such as Edinburgh, though London City, popular with business travelers, isn’t affected as those flights are operated by the CityFlyer affiliate.
The strike is the company’s first involving pilots since the 1970s and threatens the travel plans of customers at the tail end of the busy summer season. Affected passengers have been rebooked on other airlines where possible, offered alternate dates to fly, or been given refunds.
Pilots vowed to go ahead with the strike following a breakdown in talks over a new contract. The airline has accused Balpa of not acting in good faith by making “an eleventh hour inflated proposal” which BA said would cost an additional 50 million pounds. The pilots say that BA has ignored reasonable proposals for higher wages and improved benefits and their demands amount to a fraction of that sum.
The pilots have “consistently offered up chances for the company to negotiate a way forward,” Strutton said in an emailed statement on Sunday. “British Airways must now put the needs of its staff and passengers first and accept that its pilots will not be bullied or fobbed off.”
The airline sent an email warning the pilots that anyone who goes on strike will lose generous travel perks for themselves and their families for the next three years, the FT reported. BA has issued “various threats which suggest BA has no intention of helping defuse the situation,” the pilots said in their statement.
The current demands relate to pay, profit sharing, and a share-awards program, and come after cockpit crew took salary cuts in the wake of the financial crisis to help bolster the airline’s finances, according to the union.
IAG reported an 18% jump in profit in the first quarter led by earnings at BA, the best performance by an airline in the period. The strike may undermine that growth, with the carrier saying it could cost 40 million pounds a day. The pilots union put the cost of settling the strike at 5 million pounds, “one eighth of the cost of just one day’s strike action,” it said in the statement. IAG’s shares have fallen 30% in London this year.
The union called for the action after mediated talks with management at the state-backed Advisory, Conciliation and Arbitration Service ended without a deal. Cockpit crews voted to strike by a 93% majority in a poll in July.
Balpa is also campaigning at Ryanair Holdings Plc, where U.K. pilots plan to walk out for an additional seven days. Five days of strikes failed to disrupt schedules or bring the discounter — which uses many non-unionized pilots on contract — back to the bargaining table.
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