British Airways pilots have warned the airline that it risks prompting more strikes after BA blamed industrial action for falling profits and took a €137m hit from the walkouts.
International Airlines Group warned of a 6% drop in annual profits after revealing the high cost of strikes this month that led to more than 2,000 flight cancellations.
Balpa, the pilots’ union, said its BA members believed the carrier’s management was “treating them with contempt”, and had asked Balpa to consider more strike dates.
BA pilots walked out for 48 hours on 9 and 10 September, in a long-running pay dispute, causing most flights to be cancelled. Balpa also called a strike for this Friday, prompting BA to cancel all flights, before calling it off last week.
Balpa said on Thursday it was “completely disingenuous” of the airline to blame pilots for its profit performance. The union said BA could have avoided the strikes, and their cost, for an outlay of just £5m in the pay negotiations. The airline, however, has claimed that the pilot demands would cost the airline an extra £50m.
Brian Strutton, Balpa’s general secretary, said: “This is proof that BA’s intransigence towards its pilots is economic madness. Their total disengagement is evidence of a senior management team that has lost the plot and doesn’t know how to resolve their dispute with their pilots.”
A total of 4,521 flights were cancelled over seven days to account for anticipated disruption on 9, 10 and 27 September, IAG said, although 2,196 flights were reinstated leaving 2,325 cancellations.
BA also allowed passengers on other flights left unaffected by the industrial action to rebook or receive a refund. The financial impact of those pilot strikes was put at €137m. In addition, threatened strikes by ground staff at Heathrow airport cost IAG a further €33m.
The company said it had also been hit by lower bookings at its low-cost carriers Vueling and Level, resulting in a further €45m hit. This means its 2019 operating profit, excluding one-off items, will be €215m lower than last year’s €3.48bn. IAG warned that further strike action would hit profits again.
Willie Walsh, IAG’s chief executive, told analysts: “Clearly, BA bookings have been disrupted by the industrial action.”
Shares in IAG closed down 4% at 456p.
IAG said there had been no further talks between BA and the pilots’ union Balpa. The airline’s offer of a 11.5% pay increase over three years still stands and had been accepted by BA’s other unions who represent 90% of the carrier’s staff.
IAG is cutting flights generally, like other airlines. It now expects capacity to grow by 2% in the fourth quarter, less than previously predicted, and full-year capacity growth is expected to be 4% rather than 5%.
Walsh said: “We’ve seen a number of [airline] failures across Europe and there will be further failures. Most airlines are moderating their capacity growth plans for the fourth quarter and 2020.”
He said IAG would be looking at acquiring Thomas Cook’s slots at Gatwick airport following the travel company’s collapse, adding he was “pleased with the slots acquired from Monarch” when it went bust two years ago.
