British Air May Need More Voluntary Pay Cuts

123jump.com Staff
25 Jun, 2009
New York City

British Airways said that nearly 7,000 employees have shown interest in voluntary work with no pay program. The negotiations with administrative staff and cabin crew are still not final. Pilots have agreed to a small pay cut in exchange of longer work hours and a stake in the company.

[R]7:00 PM London – British Airways said that nearly 7,000 employees have shown interest in voluntary work with no pay program. The negotiations with administrative staff and cabin crew are still not final. Pilots have agreed to a small pay cut in exchange of longer work hours and a stake in the company.[/R]

British Airways said that 7,000 people have shown an interest for voluntary pay cuts as requested by its chief Willie Walsh.

The third largest European airline employs 40,000 said that the voluntary pay cuts will save the company £10 million and more savings may be needed.

At least 800 have offered to work for no salary, 1,400 have volunteered to work part time and 4,000 will take unpaid leave.

The airline pilots union has already agreed on pay cuts and negotiations will determine the status of pay for the administrative staff, cabin crew and ground personnel.

The pilots association has agreed to work longer hours and reduce pay by 2.6% and save the company additional £16 million to safeguard jobs of its members. The pilots will also receive in return stocks worth £13 million that cannot be sold till June 2014.

The Unite, labor union representing administrative staff and cabin crew suggested that intimidating emails from management may have swayed many. The company denied of any pressure on employees to participate in the program.

Airlines around the world are expected to lose total of $9 billion this year.

British Air may need more cost savings as crude oil prices have been on the rise, airline fares have been on the decline and load factors on major international routes are down.

British Air last year trimmed 2,500 jobs worldwide and lost £375 million.

Air France-KLM may be forced to raise $300 million in a bond offering and All Nippon Air in Japan is seeking more capital from the Japanese government.