Pilots at troubled airline British Airways have accepted a 2.61% cut in salaries and 78 job cuts, in return for free shares in the company. The announcement comes two days after BA appealed to its British-based staff to work for free.
AFP - Union leaders on Thursday urged British Airways pilots to accept shares in the company in return for a pay cut, in a "unique agreement" they claim will help save jobs at the troubled airline.
The announcement, confirmed by the airline, comes after BA this week unveiled details of a plan to get staff to work for free.
The pilots' union Balpa on Thursday said it was recommending its members accept a new salary package aimed at saving BA millions of pounds.
Under the deal agreed with British Airways, pilots will see their annual pay cut by 2.61 percent -- worth around 2,000 pounds (2,350 euros, 3,276 dollars).
As part of the deal, however, about 78 of 3,200 pilots will have to lose their jobs.
"The pay and productivity package will help BA get through the current economic downturn whilst, for the first time, giving pilots the mechanism to take a real share in the wealth they will help to create," said a spokesman.
The pay cut will generate 16 million pounds of annual savings, while pilots will also have to increase their working hours to help save another 10 million pounds annually.
Balpa said that in return, pilots would in two years' time be eligible to receive a proportion of BA shares worth a total of 13 million pounds if certain company targets are achieved.
The pilots will not however be able to sell the shares until June, 2014.
Balpa general secretary Jim McAuslan said: "This is a unique agreement. We have always said that as a union we would share the pain if our members shared in the gain."
In a separate statement, a BA spokesman expressed the company's pleasure at reaching agreement with Balpa, ahead of a vote on the matter by pilots.
BA had on Tuesday revealed that across the airline, staff would be able to opt for one-week blocks of unpaid leave or unpaid work, with salary deductions spread over three to six weeks, in another move aimed at slashing costs.
The airline had unveiled the controversial plan in May, when chief executive Willie Walsh also promised to work for free in July.
BA last month reported an annual loss of 375 million pounds owing to high fuel costs and slumping demand amid the economic downturn. The airline has cut 2,500 jobs over the past year.
Walsh has reportedly warned that the worst of the recession lay ahead for airlines.
According to the Financial Times, Walsh told a conference in Paris on Wednesday: "Though some of the financial markets may be looking better, I believe that for airlines, the worst of this recession is still ahead of us."
Date created : 2009-06-18