Thursday 8 December 2016

Staff walkout threatens to overshadow BA merger with Iberia

Steve Rothwell

Published 20/01/2011 | 05:00

British Airways chief executive Willie Walsh may face a sixth round of walkouts by 11,000 cabin crew that threatens to cast a shadow over a merger with Spain's Iberia.

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The Unite union plans to announce the result of a month-long strike poll of flight attendants tomorrow, the same day British Airways (BA) ends almost 25 years as a mainstay of the UK stock market before joining with Iberia next week.

"It seems clear to us that there will be a positive return and a call for industrial action," Brendan Gold, Unite's national secretary for civil aviation, said yesterday.

British Airways rented planes and trained staff from other parts of the company to act as emergency crew when flight attendants walked out for a total of 22 days in five strikes last year in a dispute over pay and staffing levels.

Still, the action cost about £150m (€178m), and a repeat would pose a "serious headache", said Douglas McNeill, an analyst at Charles Stanley.

Distraction

"BA has a well-rehearsed contingency plan, which seems to be relatively effective, and it should be a short-term problem, but remains a distraction," said Mr McNeill, who has a 'reduce' rating on British Airways stock.

Iberia lost 8c, or 2.2pc, to €3.55 in Madrid, making it the biggest loser in the eight-company Bloomberg EMEA Airlines Index. Before yesterday, the stock had gained 11pc this year.

British Airways fell as much as 2.4pc and traded 1.6pc lower at 295.2 pence in London.

The merger, which values the combined carriers at $10bn at market value, will help British Airways narrow the gap to Air France-KLM Group and Deutsche Lufthansa, Europe's biggest airlines.

Mr Gold said the timing and scope of a walkout would probably be announced at a later date.

The dispute originally concerned pay and staffing levels but now centres on the suspension of strikers and the full restoration of travel perks.

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