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Cabin crew dispute ongoing
British Airways (BA) announced today (November 6) a loss before tax of £292m. Passenger revenue was down 13.5%, while capacity was down 3% on last year.
The airline also reported an operating loss of £111m between April and September. Over the same period in 2008, the airline made £140m in profit.
Willie Walsh, BA's ceo, said: "Aviation remains in recession with IATA predicting that the industry will lose $11 billion this year. We were quick to respond to the crisis by taking out excess capacity and, at the same time, driving down unit costs by 5.2 per cent.
"It's imperative we continue to deliver on our plans to reduce costs further in the second half. With revenue likely to be £1 billion lower this year, we can't stand still and further cost reduction is essential."
Mr Walsh added that structural change is necessary to secure long term profitability for the airline, which means cuts in staff numbers and changes in operations.
"The global airline industry is facing continued pressure on yields highlighting a significant shift within the industry," he said.
"We will introduce further structural change in the second half to secure the long term future for our business. We are cutting winter capacity by 6 per cent and making further manpower reductions of 3000 by March 2010 and permanent changes to the way we run our business.
"We reduced summer schedule capacity by 3.5 per cent, our costs are some £400 million lower and manpower has been cut by 1900 through reduced overtime, increased part time working and targeted voluntary redundancy."
The announcement comes amid ongoing disputes between BA and its cabin staff, which saw the union Unite launch a legal battle against the airline yesterday.
Unite, which represents the majority of BA's 14,000 cabin crew, filed an injunction at the High Court to try and stop BA introducing new working arrangements. The hearing took place yesterday, when it was decided by the court to proceed to a full trial on February 1.
A Unite spokesperson said: " In many ways it's BA's worst nightmare. It will keep this dragging on. They will put into place their new rosters and new schedules, but with this big question mark hanging over whether they can be permanent."
The union is also set to ballot its members on possible strike action, the results of which will be announced on December 14, leaving open the threat of disruption over the festive season.
Despite the dispute, the planned contractual changes will go ahead on November 14 as planned, confirmed BA's ceo Willie Walsh today.
Mr Walsh said: "Following yesterday's court outcome, we will go ahead with changes to cabin crew working on November 16. The changes for existing cabin crew involve no alteration to any part of their contract of employment.
"There are no reductions in base salary and payment of incremental increases, worth between two and seven per cent for more than 10,000 crew, are going ahead. Overall, 75 per cent of existing crew benefit from these incremental increases.
"We urge Unite to withdraw its plans for an industrial action ballot and resume discussions with us on other ways of ensuring that we get into the right shape to secure long-term profitability in the interests of our customers and all our staff."