Posts Tagged ‘BA Strike’

One friend is hoping that the BA does go ahead. He has planned a family holiday in the USA and is scheduled to return to the UK in time for a major visit from the in-laws. He has booked himself on British Airways in the hope that they strike and he can stay away throughout the in-laws visit. Every dark cloud has a silver lining, as they say.

At first it seemed like a straight forward industrial action. Now newspapers are suggesting that a power struggle with Unite union is a key ingredient along with a seeming total breakdown in relations between cabin staff and British Airways.

You can sense a massive behind the scenes PR programme from both sides as they attempt to salvage their reputations in the face of total consumer disgust at the strike. For all participants this is a high stakes strategy with a lot of questions.

1. Did the BA management  think they could bluff thinking that staff would never strike over christmas period.
2. Does Unite’s McCluskey think he can prove his credentials and force a climb-down from BA?
3. What attitude will investors take? This last question is critical. Many investors will take the view that the management need to break the cabin crews once and for all and the price is worth it if BA can achieve a lower and more flexible cost base.
4. What is the long term cost to BA’s reputation? Xmas is the worst time to ruin people’s holidays.

The Stakes for Unite

Unite are trying to suggest that management are incompetent and wanting to run a Ryanair (the world’s most profitable airline, by the way) whilst management are countering with the assertion that crews are massively overpaid for what they do and the value they add.

Watching Twitter it is clear that BA is winning the reputation battle as customers beg staff not to strike.  For Unite’s leadership they are charting a course that is perilous in the extreme.

For Unite, the existence of other planned strikes at Heathrow by baggage workers make this period a PR nightmare. There is a strong strong whiff of union activism which for struggling consumers, many of whom are facing job threats, is distinctly out of step with the times.

Stakes for BA

BA are facing a customer melt-down of epic proportions if the strike goes ahead. But equally problematically, investors want to see who is running the airline – management or cabin crews. Walsh feels he must impose changes and most investors agree. If management lose or even blink, expect the shares to go south, fast. Investors see this like the Miners strike in the 1980s. A defining moment in BA’s history.

Stakes for the Government:

This is a lose-lose situation for this government. They cannot support either side without alienating one community and yet platitudes just make them look weak.   The sense that UK Inc is broken continues.

The 12-day strike called by Unite union looms large this holiday season putting hundreds of thousands of people and their travel plans in jeopardy. As British Airways fears the backlash, forums are swamped by passengers venting their anger against the insensitive approach of more than 13000 cabin crew who have voted for the strike.

The strike is planned in protest to the proposed pay and job cuts that BA has planned to ease its pension deficit of £3.7 billion which is likely to more than double to £8 billion this year. Unite union’s 13000 cabin crew are expected to join the strike even though they are paid double that of other airlines like Virgin.

In a bid to get the union to call off the strike and save its reputation, British Airways have resorted to legal action. “The airline called on Unite to call off the industrial action by 2pm today. The union has not done so and BA is now seeking an injunction to prevent the strike from going ahead,” the flag carrier’s chief executive Willie Walsh said in a statement last night. The legal action is taken on the grounds that there were irregularities in the strike ballot.

The papers are full of articles citing passenger anger at the strike which is to begin on December 22nd to Jan 2nd 2010.  Would you plan your holiday booking with British Airways after this fiasco? Chances are you will not, if this issue does not resolve well.

It would almost be impossible to recover from this bad reputation for BA. The service industry is constantly dogged by bad reviews, bad press, and negative forums and an internal crisis like this will be nothing short of a disaster for BA’s reputation.

Damage limitation is what is being resorted to and BA plans last-ditch talks to solve the issue.