Struggling British Airways (BA) said on Thursday that 800 staff had agreed to work unpaid and thousands more agreed to pay cuts, helping the group save up to £10 million (US$16.3 million).
After diving into a financial loss, the airline last month asked staff to work for free, while promising that chief executive Willie Walsh and BA’s finance director Keith Williams would forgo their salaries next month.
“This is a fantastic first response” to BA’s cost-cutting program, Walsh said in a statement on Thursday. “I want to thank everyone who has volunteered to help us pull through this difficult period. This response clearly shows the significant difference individuals can make.”
But one senior union official said staff had been bullied into accepting BA’s proposals.
“Less than 2 percent of the entire workforce volunteered to work for free,” said Steve Turner, a national officer for Britain’s biggest union Unite. “While we support means to mitigate redundancy, workers were sent intimidating e-mails from senior managers which we believe put pressure on staff to volunteer for one of the changes BA proposed, otherwise they would get a meeting with a manager. This bullying and constant harassment of our members is unacceptable and will not be tolerated.”
The world’s leading commercial airlines are facing a major cash squeeze as the global economic slump crushes demand for plane tickets.
BA last month reported an annual loss of £375 million, also blamed on high fuel costs. The airline has cut 2,500 jobs worldwide.
On Thursday, a BA spokesman said: “800 [have] opted to work for free” for up to a month.
The airline added in a statement: “Nearly 7,000 British Airways staff have taken an early opportunity to apply for voluntary pay cuts in support of the airline’s cost reduction program. Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work ... Their actions will save the company up to £10 million.”
BA’s announcement came shortly before the end of stock market trading. The airline’s share price closed up 1.04 percent at £1.266 on the London Stock Exchange.
Staff who are working unpaid will still receive shift allowances and other payments, although they will forgo their basic pay.
However, Mick Rix, representing the GMB union, hit out at BA for releasing data on pay cuts while negotiations were ongoing.
“I find it disgusting that the company can make the announcement today,” Rix said. “We are locked into hard negotiations on making significant financial savings, but BA seems only interested in making headlines rather than reaching an acceptable deal.”
Last week, union leaders urged BA pilots to accept shares in the company in return for a pay cut.
Under the deal agreed, pilots will see their annual pay cut by 2.61 percent and most jobs safeguarded.
The pilots’ pay cut would generate £16 million of annual savings, while pilots would also have to increase their working hours to help save another £10 million annually.
In return, pilots would in two years’ time be eligible to receive a proportion of BA shares worth a total of £13 million if company targets are met. The pilots will not however be able to sell the shares until June 2014.
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