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May 20, 2024
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The British Airways strike is costing the £40 million per day and has now entered the second of two planned days. An additional strike is possible on September 27th should an agreement not be reached by then. BALPA, the pilots union, claims that the difference between the company and pilot proposals is around £5 million annually and could have easily been settled. Is a compromise that hard to come by when the economic consequences of industrial action are a high multiple of the proposed contractual differences?

From the company perspective, an 11.5% deal has been accepted by 90% of the company’s employees, but not by the pilots. The company wishes to maintain the same terms across the board.

We understand that a concession, once given, remains forever. But the costs from the industrial action clearly outweigh the contractual differential. Particularly with the ill will created with customers whose plans are interrupted. Many will book to some other carrier for their next trip. With a daily impact the equivalent of eight years of a contract, the economics, as explained in the press, simply doesn’t make sense. From a cash flow and time value of money, losing £80 million in two days to save £5 million per year is foolhardy.

This appears to be a situation in which both sides are being quite stubborn and sticking to no-compromise positions. With 100% of British Airways flights canceled, the impact on international travel and re-accommodation of passengers for two days is staggering.

Sometimes a union will have management over a barrel, and sometimes the other way around. The question is whether by pressing the issues too hard, are both sides helping to destroy their own futures? British leadership has disappeared in political, industrial, and labor union positions, as demonstrated by Brexit (or lack thereof) and by this unnecessary and inconvenient industrial dispute. Whatever happened to common sense?

author avatar
Ernest Arvai
President AirInsight Group LLC

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