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Jun 10, 2009

British Airways looks to 2,000 job cuts to stay airborne

BRITISH Airways boss Willie Walsh has refused to rule out compulsory redundancies among the airline's 40,000 staff after setting a three-week deadline for an agreement on pay cuts and job reductions.

BA is offering voluntary redundancy to its 14,000-strong cabin crew in an effort to cut 2000 jobs.

Speaking at the annual meeting of the International Air Transport Association in Kuala Lumpur, the BA chief executive said he had set a June 30 target for reaching an agreement on pay deals because the industry was in a "fight for survival". Talks with the various unions will begin today.

Asked if BA was considering compulsory redundancies, Mr Walsh said: "I would not rule that out. We will take whatever steps are necessary to see the business through this crisis. We are working together and, I would say, generally constructively so far. But we have significant challenges that must be addressed."

Mr Walsh was confident there would be a good response to the voluntary redundancy program. "We know there is huge pent-up demand among the cabin crew group," he said.

But negotiations with cabin crew have been fraught in recent years.

A dispute with flight attendants cost the airline £80 million two years ago when they called off a threatened strike at the last minute. BA was able to run a full service but was left with multimillion-pound losses and empty terminals at Heathrow Airport after passengers avoided the airline or sought compensation for their bookings.

Mr Walsh denied that BA passengers faced a summer of strike action that could further damage a business that lost £401 million ($A816 million) last year and would disrupt the holiday plans of hundreds of thousands of passengers.

Asked if holidaymakers faced strike-led disruption, Mr Walsh said: "I don't see it. We have got very intelligent people working for us at BA. They can see what is happening in the industry. Everyone in the business can see that this is not a temporary blip and it's a massive challenge facing all airlines."

Mr Walsh said the airline would struggle to survive if it did not tackle costs, as the industry gathered in Malaysia to debate how to reduce a forecast combined loss of £5.7 billion ($A11.6 billion) this year.

IATA economist Brian Pearce warned this week that airlines could shed 100,000 jobs this year.

"I have talked about this industry being in a fight for survival and BA, as part of the industry, is in a fight for survival," Mr Walsh said.

Trade unions have called for short-term pay changes but are so far baulking at permanent alterations to their contracts.

Mr Walsh was adamant airlines faced a long downturn and any economic recovery would not be fast or strong enough to save them.

Source : TheAge
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