Labor dispute hurts BA’s brand image

Stephen Beard Mar 19, 2010

Labor dispute hurts BA’s brand image

Stephen Beard Mar 19, 2010


KAI RYSSDAL: Transportation workers over in the U.K. are mad as heck and they’re not going to take it anymore. Railway workers approved a strike resolution today after negotiations broke down. Another major labor dispute is going to take off tomorrow, between one of the country’s biggest unions and British Airways. BA cabin crews are set to strike for the next three days. And then walk out again later this month for another four. If you’re scheduled to fly, well, hopefully you’ve already made other plans.

From London, Marketplace’s Stephen Beard reports.

“Flower Duet” by Delibes, from “Lakme”

Stephen Beard: The music in BA’s advertising may be ethereal, but this dispute is rancorous.

Willie Walsh, British Airways’ CEO: Everybody can see that this is a trade union trying to destroy British Airways. That is what this is all about.

Tony Woodley, joint general secretary of Unite trade union: This is a very serious industrial dispute with an employer that is hell-bent on destroying our members’ wages and terms and conditions and destroying this union.

BA wants to cut cabin staffing levels, freeze basic pay and put new recruits on a less generous contract. Analyst Howard Wheeldon says this could be a make or break battle for an airline that lost $600 million last year.

Howard Wheeldon: If it doesn’t change, if it doesn’t bring its cost base down, if it doesn’t slim down, then it won’t survive.

Sound of airplane taking off

BA is well prepared for the strike. The airline says it can maintain two-thirds of its flights. It’s recruited thousands of volunteers from elsewhere in the company to replace the strikers.

Mark Pilling of Airline Business Magazine says this is the perfect time to divide the work force.

Mark Pilling: Because the airline is in worse shape than it’s been in years, this is the time you can go to your staff and say, “Look how bad a situation we’re in. We need to do something to remain competitive, otherwise, let’s face it, we won’t be a viable business.”

But the union representing the cabin crews is not called Unite for nothing. It’s appealed to foreign unions across Europe and in the U.S. to join the fight. And that appeal has paid off, says Gabriel Mocho of the International Transport Workers’ Union.

Gabriel Mocho: Depending on the possibilities of each union and the legal framework of each country, a lot of unions have already informed us that they’re going to support this strike.

The legal framework, however, is critical. It’s still not clear whether baggage handlers in Italy, air traffic controllers in the U.S. or aircraft refuelers in France would be allowed to take action against British Airways flights. And Unite is coming under intense pressure much closer to home to call off tomorrow’s action.

Prime Minister Gordon Brown: It’s the wrong time. It’s unjustified. It’s deplorable.

British Prime Minister Gordon Brown.

Brown: We should not have a strike. It’s not in the company’s interest, it’s not in the workers’ interest and it’s certainly not in the national interest.

And it’s not in his interests either. Unite is his paymaster, the largest donor to his Labour Party’s campaign funds. With a general election likely in six weeks, Brown does not want to be linked with travel chaos and canceled vacations.

Announcements in Heathrow Airport

The strike has already disrupted thousands of travel plans. Nick Wootton had arranged to fly BA to Las Vegas for his honeymoon. Rebooking with another airline will prove too costly.

Nick Wootton: I think it’s affecting a lot of people, myself, personally. It’s taken us a year. We planned for this over a year. I’m devastated by it.

BA may well win its showdown with the union, but it seems certain to suffer considerable brand damage. And it will take of a lot of ethereal advertising to repair that.

In London, this is Stephen Beard for Marketplace.

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