BA: Heavy turbulence
It'™ll be precisely 20 years since British Airways'™ shares started trading as a privatised company on 11 February. And although in many ways its story since then has been one of success in a highly volatile industry, the relations between management and employees seem to have been ossified: by British standards, the company is unusually unionised; its trade unions are immensely powerful; and there appears to be considerable mistrust of management among employees.
In all those two decades, only one BA chief executive, Bob Ayling, tried to confront the power of the trade unions head on. And although he succeeded in pushing through changes to working practices after a painful cabin crew , the cost to corporate cohesion was perceived by his fellow board members to have been too great. Ayling was ultimately ejected from the cockpit. The unions may have lost the 1997 battle, but they could tell themselves they had won the war.
For shareholders in BA, the big question is therefore whether the dispute which ended yesterday will make it easier or harder for the current chief executive, Willie Walsh, to respond to the intensifying competitive pressures in his industry. Now for all the talk about consensus and compromise in the aftermath, if I were a trade unionist I would be feeling pretty content. There was overwhelming support for strike action from cabin crew, the company has made concessions in the way it manages sick leave, there'll be an above-inflation pay settlement this year and differentials between the different vintages of cabin crew employees have narrowed.
Now in terms of the financial stability of the company, it's hardly trivial that the settlement improves the prospects for a vital deal to reduce BA's yawning . But it's not obvious that what is arguably the business's great structural flaw -“ industrial relations that are redolent of the darkling days of the 1970s and 1980s - is any nearer elimination. If I were a shareholder, I might be feeling a little bit airsick today.
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What has happened here is akin to its easier to break one stick, but when you have a unified collection of sticks it becomes that much more difficult.........perhaps those who chose not to be part of the bigger collective should reconsider the future, for they too may have a need!
Frankly I am not interested in flying BA any more. For too long now its Union leaders have strenuously defended dishonest working practices which amount to nothing more than theft. Let the company go bust and see them lose their jobs.
What's the Cabin Crew sickness rate like today?!
I used to be a Ba crew member , retired two ,years ago , have gone throught four strikes since i was there ,
Now i am pleased to be out of it all.
The years of Ayling where tought , but Willie Walsh seems a tought coookie
I felt for all my friends that are still cabin crew , i know the problems of being crew.
They do a great job.
BA rate of sickness is down to 12 days from 22. That's average out of 10.000 staff.It means some abuse system and go sick whenever there is hangower or 'just doesn't feel right to fly that shift to Lagos today'. How many days have you been on sick leave over last 12 months?
Robert
Why is so wrong for ordinary people to fight for a decent wage, pension and working environment. What is so archaic about that.
It's almost unbelievably short sighted of BA management to reinstate these flights at the last minute, incurring massive revenue losses by letting them operate almost empty. Leaving the aircraft on the ground would have cost less.
Talk about adding insult to injury. This simply adds extra financial loss to the damaged reputation of an airline which I hope never to have to fly again.
Willy wobbled. Time to go.
Enjoying your blog very much. I dont think that unionisation is itself the issue at BA, and the company has always tried to create a myth that it is uniquely unionised whilst others are not. Both Virgin Atlantic and Virgin Trains are unionised but people attitudes are generally more positive in these companies towards management. The issue at BA is more likely embedded in its bureaucratic state owned past, whose culture still stalks Heathrow. The "Christian cross" fiasco sums it all up, it took several weeks before there was any senior management intervention over this issue which drove the morale of frontline staff to rock bottom. Willy Walsh will need to wield the axe at Riverside HQ rather than at check in, flightdeck or engineering if he wants to treat the disease effectively.
It called the slow death match. Look at Ford, General Motors. When the unions are too powerful you can see the slow death of the corporation. Please dont blame the unions, It weak managements that have the unions so strong. So how we know where the problem lies lets get rid of the board of directors had hire these twiddle executives..
Anyways, I fly Ryan. haha
Can't help feeling you might have been better digging into why the airline is still heavily unionised and why there is such distrust of management. Is this distrust caused by unionisation or is the unionisation a function of it ? That's certainly more relevant than your implied distrust/dislike of unions that flows through this article.
My wife and many of our friends are cabin crew for BA, the management constantly try and make huge changes which is why these problems occur. The union is just protecting its employees.
If BA were to phase things in gradually most would not notice them happening. Also, they seem to forget that the cabin crew are their face to the customer and if they are not happy the BA customer will not get the service they expect.
When 80% of your staff vote against changes then something is bad.
Virgin staff don't strike because Mr Branson values them, unlike Mr Walsh.
The article was a press release by the company surely? It was an opinion by a so called journalist(do they really think we only beleive their rubbish.
He quotes " if I were a shareholder I might be feeling a little airsick today". If's and mights! If I was rich I would not be sitting here typing this, arrggghhh. Put forwrad your argument not your opinion.
I fly BA a lot the service is superb and the cabin staff are very professional. When you listen to some of the nonsense they have to put up with, Air rage, Idiots who do not know when it's time to stop drinking and the unbelieveable requests. A few I have heard are: "I left my mobile in LA could you ring the airport and get them to find it for me!" or "the choice of menu is chicken or beef I dont like either could you go and get me some Lamb"
" Not really we are 38,000 feet up"
"Well surely you must be able to get some from some where" and finally "I have an allergy to nuts and I have just eaten two bags of them I will sue you if I die"
These people are trying to make a living in a tough world the mangement need to look at their roles strengths and weekness's and then some of them need to resign.
I cant imagine that the "suits" at BA will be enything less than very generous when it comes to arranging their own salary and pension packages.
Good luck to the ordinary workers without whom the Company would colapse.
These union members pay thier ´óÏó´«Ã½ license fees too, and they don't need twits harping from the sidelines while they deal with big business greed. If you want to go after a union, don't go after these guys - go after the BMA. The scoungers there earn £120K a year each directly from the taxpayers while working less hours than ever.
The fact that they have an average of 12 days sick leave stands by itself as a marker for a company in crisis - for the union to defend such a position (I'm assuming they did) is deplorable. It would be interesting to compare the statistic with other FTSE companies that do not have such union support - I think I would be worried if I was a shareholder
Virgin may be unionised in some areas but not all.
Engineers at Virgin were balloted on whether they would want union representation. They voted no. They are treated with dignity, respect and paid a fair wage with good travel concessions. So what do they need a union for?
If BA did the same for their staff maybe there would be a bit more harmony.
It is not BA's upper management that is the problem it is the middle and lower managers who "fought" their way up and now are determined to stamp on those below because that is how they were treated when they were at the bottom of the heap.
And yes I am ex BA. I got out and found a much greener grass. Thankyou RB.
As A BA crew member I am glad the strike did not go ahead. We just want to get back to normal now. As to the reasons it is not so much that we are heavily unionised but poorly managed, and when we are managed it is very heavy handedly. Hopefully lessons can be learnt from this on both sides.
As to planes flying empty costing money - they were to pick up passengers and crews "down-route". Parking a Jumbo jet costs £100's per minute and moreover there simply is not the space at LHR..
We are proud of the service that we offer and were making a stance which unfortunately has impacted on the travel plans of many, but we hope to move on and to be of excellent service to you all again sometime in the near future.
Robert,
Your high level of concern for BA shareholders is admirable but it would be nice if you tried a little harder to understand why the cabin crew felt they had to take some action. I didn't read or hear anywhere on a ´óÏó´«Ã½ outlet that the salaries for those who joined after 1997 were a maximum of less than £15,000 for doing a very difficult job. As an ex-union official (not T&G), I got used to the media not trying - or wanting - to present a fair case for the employees. Unions always 'threatened', employers 'offered' or 'responded'. Language is important and facts even more so. Few business journalists have much experience of industrial relations; they spend too much time worrying about boardroom personalities or share prices. Next time you're sitting comfortably in business class, have a look at the hard-working people ministering to your needs and ask yourself whether you could do their job.
One only has to look at the demise of Ansett Australia to see what can happen when union demands/strength overwhelm the business operating model required for ongoing viability.
Consider the other news that was leaked during the dispute. BA directors like Martin Broughton are to receive an improvement to their £3.1m reward package.
It seems that while BA were fighting for cost cuts from their employees, the executives were 'feathering their nests' and upgrading their families' unlimited first class travel to the same status as commercial passengers. Three first class tickets, LHR-JFK are valued at £10,499 which is also the starting salary of a BA Heathrow crew member.
As a member of crew, I would like to see the measure of productivity/success that was used to determine the legitimacy of this this reward.
To bring up Ansett is totally disingeneous . Ansett went under due to extremely poor management. In fact if the unions had been a bit stronger they would have been able to stop management "cost cutting" in the maintenance area , which was what ultimately brought Ansett's demise.
British Airways service is pretty good overall , it is just they are a bit unreliable as they never stick to timetable and you can't be certain the flight will operate. Hardly frontline staff's fault.
I'm not sure I understand quite why a union which represents its members interests against management and the company is such a problem. After all, Volvo and Scania don't have these problems with their unions - but perhaps that is because the Swedes treat their staff with rather more respect than BA (and for that matter many UK companies) treat their staff. Management isn't just about making money for shareholders - without content competent staff the company is nothing, and a large part of management is about leading the staff in the direction desired. And thats leading, not herding and/or beating. Sadly, the them and us culture (with its roots in the class system) still permeates many UK companies, and prevents a more constructive approach to industrial relations.