The British Airline Pilots Association (BALPA) has announced a tentative "pay and productivity package" which should allow British Airways to realise permanent annual savings of £26 million ($42.5 million) beginning 1 October. The offer comes in response to a 30 June deadline set by the airline's management for various employee groups, which have been asked to suggest new policies that will help the airline survive a severe global economic downturn.
The pilot's association said the deal "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." The offer has been made subject to ratification by members.
It is estimated that some 95 per cent of BA's 3,200 pilots are BALPA members.
The offer worked out by BALPA involves pilots taking a 2.6 per cent pay cut and a 20 per cent reduction in flying allowances. The combined measures are expected to result in savings of £16 million. An increase in annual duty hours, shorter turnaround times on short-haul flights and reductions in crew facilities on "certain" long-haul routes will generate the remaining £10 million.
The offer includes 78 voluntary redundancies.
In return members of the pilot's association expect to receive shares in the airline worth £13 million in June 2011 if certain targets are met. The shares will be locked in for a period of three years.
"We have been doing some intensive research and polling over the last two months. Our research indicates that BA is facing a real business challenge and this is not the case of the employer crying wolf," BALPA general secretary Jim McAuslan said.