British Airways in Financial Straits - Asks Staff to Work For No Pay

British Airways is fighting for survival after reporting a £401m pre-tax loss in May.

Two of its survival tactics have became clear:

1. It has appealed to its 40,000 strong work force to opt for blocks of unpaid leave or unpaid work in a bold effort to help cut costs.

2. It is planning to shed between 2000 and 4000 jobs again to cut costs and streamline its operation.

Under the headline Action Time an article in the in-house newspaper British Airways News reads: "Colleagues are being urged to help the airline's cash saving drive by signing up for unpaid leave or unpaid work." The CEO Willie Walsh who earns about £61,000 a month said that he would be working for no pay in July.

The article explains how this will work: "From tomorrow, people will be able to opt for blocks of unpaid leave or unpaid work, with salary deductions spread over three to six months, wherever possible ... The unpaid work option means people can contribute to the cash-saving effort by coming to work while effectively volunteering for a small cut in base pay."

Naturally the Unions, while acknowledging the seriousness of BA's plight, are not at all happy with these proposed measures and see them as ill-conceived and not containing a long-term solution.

Also, comments in the Professional Pilots Rumour Network show that they are not impressed either.
As Betpump5 remarks: "The CEO who is giving up one month's salary is nothing but a drop in the ocean. But the guys on 18K-24K would see 200 quid a month out of their wages for 6 months!"

It is going to be interesting to see how this is going to play out. In the current economic climate, survival is paramount. There is an unspoken, underlying belief that the economy will recover, that these tough times will eventually pass and renewed growth will follow - but not before there has been some fundamental reorganisation. We have seen this lately in the some industries in the US where the work force have bought into companies to keep them afloat.

News source: Sky News and Yahoo UK