Leading European carrier British Airways has made it clear that it will not put up with the strike threat imposed by its employees and the trade union, Unite. BA is going through a bad phase and it has incurred major losses this financial year owing to reduced passenger volume and the global economic meltdown. It is trying to bounce back in business by merging with Spanish carrier Iberia and the talks are on the verge of finalization. The merger is a result of a long drawn negotiation between two carriers. However, its woes are far from over. The new cost cutting policies have made its employees agitated who have threatened to start a Christmas strike. Besides, rival airline Ryanair has predicted that it will topple BA and become the largest airline of UK within a few months.
It is evident that the BA management is in no mood to relent to the demand of the Union and its affiliated workers easily. The airlines management has already issued a warning letter to Derek Simpson and Tony Woodley. They are Unite’s joint general secretaries. BA has said that if the union puts up stickers on passenger luggage and inside planes like it did earlier, it will have to cleaning cost and face stern legal action. The airline has also restricted the employees from attaching badges promoting the strike on their attire while they are on duty. They are also prohibited from sharing leaflets in the BA premises.
The airline lost a huge £292 million in 2009 after losing £401 million the previous year. The BA management is determined to save money on every ground and keep its operational costs down. However, the Union is also trying to motivate the workers to opt for the strike if the airline does not stop the new policies from being implemented. It has issued a mail to the workers that urges them to stand up for their rights and resist the terrible cost cutting measures that BA is trying to impose upon the workers. Ryanair’s claim of toppling BA shortly has added to the problems of the loss making airline.
Ryanair saw an increase in its passenger volume in the recent times. It carried 36.4 million passengers for six months till September. While BA is cutting down the number of its Winter flights, Ryanair is about to increase its range. However, the expansion plans of the airline will depend on the successful deal with Boeing which will fetch the company 200 new planes. By 2012, it is expecting to get 100 aircrafts. If Ryanair fails to obtain these, it will make changes in its future strategy and pay back the shareholders.
Owing to its encouraging rate of growth, Ryanair has kept its fares on the lower side so far. Its average fare hovered around £35 in the last 6 months. As the demand nosedives during the winter, the airlines may consider reducing the fare further by 20 percent. The airline was able to raise its net profits to €387 million in 2009 mainly because of a drop in aviation fuel price.
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