First with Financial Comment from Arabia

How the BA strike is a gift to Emirates, Etihad and Qatar Airways

leave a comment »

All Emirates flights to London yesterday were full to the brim as British Airways cancelled one of its three daily flights from Dubai due to strike action by cabin crew. The airline’s only daily flight to Bahrain was also cancelled.

This suicidal strike is reminiscent of the coal miners’ strike in the 1980s. Then miners rose up for higher wages and against pit closures. Today very few people work in privatized British mines.

Lifer contracts

British Airways cabin staff have long been the envy of the industry with their jobs-for-life contracts, high pay and travel perks as well as generous pension plans. That these staff are striking because they are unable to adjust to changing circumstances in the global air travel market is a suicidal blow to British Airways, already struggling with big losses in the global business slump.

British Airways has been hit on short-haul flights by the upstart low-cost carriers. Now it is surrendering its profitable long-haul routes to the new giants of the sky like Emirates, Etihad and Qatar Airways.

These carriers do not suffer the legacy costs of BA staff. There is no attempt to pretend that being a member of cabin staff is a profession and not a glorified waiting service. Young, attractive staff are on short contracts to see the world, not to become old and tired in their job.

Needless to say the pension rights are also not the same. Virgin Atlantic says it abandoned any plan to bid for BA once it saw the pension fund shortfall.

BA might win its strike but it has damaged its reputation in the process, and even more in the six months leading up to this industrial action. How do passengers booking today know whether this dispute will still be rumbling on, or reemerge when they fly?

Gulf airlines

In the Gulf States travelers have a particularly good set of alternatives, even if the shortage of seats caused by the BA dispute has brought a sudden end to the bargains previously available on many routes.

Can BA survive this? Some would argue that bankruptcy is the only solution. Then it would be possible to sack all the staff on legacy contracts and engage new staff at competitive rates.

In the 1980s it was the miners who symbolized the battle to modernize Britain. Now it is the British Airways cabin staff. They behave as though their airline belonged to them and that it enjoyed a monopoly. Those days are long gone and the future lies with the Gulf carriers.


Written by Peter Cooper

March 21, 2010 at 9:25 am

Posted in Aviation, Banking, Travel

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: