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Business

High Court rules British Airways union strike action legal

Text by News Wires

Latest update : 2010-05-20

The British Airways cabin crew trade union, Unite, has won an appeal against a High Court ruling that had blocked a new wave of walkouts by the airline's staff.

REUTERS - A British Airways cabin crew trade union won an appeal on Thursday against a court injunction brought in this week to stop a new wave of walkouts by the airline’s staff.

Seeking a settlement, the Unite union said BA crews would go on strike for five days from Monday unless the two sides could settle a dispute over pay as the airline tries to cut costs.

Unite said further strikes would take place for five days from May 30 and five days from June 5, should there be no peace deal.

Travel through London, one of the world’s busiest airline hubs, was hit by BA crew striking earlier this year, before Iceland’s volcanic ash cloud caused more widespread disruption last month.

“BA management now has a chance over the next three days to address our outstanding concerns and seize the possibility for industrial peace,” Unite’s joint general secretary Derek Simpson said in a statement on Thursday.

“Failing that, cabin crew will once more be taking industrial action with our full support.”

Two of the three appeal court judges ruled in favour of Unite in a knife-edge decision. One of them said a small infringement in the way the strike was balloted—the case for BA’s injunction on Monday—should not invalidate the ballot.

BA, which is in the process of merging with Spanish airline Iberia, said in a statement it was “very disappointed”, adding that it had a contingency plan to keep planes in the air and fly more tha 70 percent of customers.

BA is trying to get a deal with Unite which will save 62.5 million pounds ($90 million) a year to counter falling demand, volatile fuel prices and greater competition.

Unite said it had come to an agreement in principle with BA over its cost-cutting plans but the restoration of travel perks for striking staff had not been agreed, holding up settlement of the wider dispute.


 

BA’S FINANCIAL WORRIES

Originally the union had planned to stage four strikes from May 18-22, May 24-28, May 30-June 3, and June 5-9.

The dispute with cabin crew has already caused seven days of strikes in March, which cost the airline 45 million pounds.

The walkouts come at a bad time for the airline, which is due to present its full-year results on Friday.

Shares in BA fell 3.2 percent to 186.5 pence, valuing the business at around 2.2 billion pounds.

“This increases near term uncertainty on BA’s business,” Davy Stockbrokers analyst Stephen Furling said of the strikes.

BA’s merger with Spain’s Iberia, which is eventually expected to generate 400 million euros ($497 million) a year in cost savings, will help BA recoup its strike-related losses when it is finalised later this year.

BA also expects to cut costs further by merging its transatlantic operations with American Airlines, which will allow the pair to operate as a single airline if the tie-up is cleared by regulators.

BGC Partners analyst Howard Wheeldon said the Iberia deal would go ahead and many striking staff could become “superfluous to requirements” once the merger is finalised.

Date created : 2010-05-20

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