March 19, 2010
British Airways Strike Begins, Threatening a Weak Economy
LONDON — A three-day strike by some employees of British Airways began Saturday, posing another possible blow to Britain’s battered economy.
A last effort by British Airways and the Unite trade union representing some of the airline’s employees had failed Friday when talks collapsed. A second walkout of four days is scheduled to start March 27.
“We are very disappointed that, despite lengthy negotiations, Unite has rejected the chance of a settlement and resolved that its strikes should go ahead,” Willie Walsh, the chief executive of British Airways, said in a statement.
Tony Woodley, general secretary of Unite, said in a statement that that he was “extremely disappointed” that the strike would go ahead but that British Airways’ offer was worse than one made last week. Mr. Woodley accused Mr. Walsh of wanting to “break the union.”
Mr. Walsh rejected the charge as “absolute nonsense.”
British Airways and Unite, Britain’s biggest trade union, had been negotiating changes to working conditions and pay. The talks collapsed Friday even as Prime Minister Gordon Brown urged the sides to settle.
The labor disruptions are occurring at a critical time for Britain and its fragile recovery. The country is already reeling from high unemployment, weak consumer spending and a shrinking financial services industry, and some economists fear that any disruption could easily send the economy into another downturn.
“You have to recognize there is some risk of a double dip, but that’s not the central forecast,” Andrew Sentence, a Bank of England policy maker, said in an interview with CNBC this week.
The weekend strike is expected to cause major disruptions to flights, but British Airways said earlier that contingency plans would allow 65 percent of its customers to fly. Still, the airline canceled 1,100 of the 1,950 flights scheduled for the next three days. To limit disruptions, British Airways plans to fly more larger planes during the strike period and cancel more short-haul than long-haul flights.
Separately, the trade union representing rail maintenance workers of Network Rail voted to strike in a dispute over job cuts and more weekend work. The union, the National Union of Rail, Maritime and Transport Workers, has yet to schedule dates for a strike to protest plans to cut 1,500 jobs. Network Rail runs and maintains rail tracks, tunnels and rail bridges in Britain.
In addition, some public-sector workers, including employees at job centers and tax offices, plan to strike on Wednesday to protest government proposals to reduce their compensation.
The labor strife is occurring as Alistair Darling, chancellor of the Exchequer, prepares to present proposals on Tuesday to reduce Britain’s record budget deficit. It will be the current Labour government’s last budget before general elections this spring.
Mr. Darling needs to present plans to reduce spending that are far-reaching enough to strengthen confidence among investors while avoiding deep cuts that could threaten to reverse Britain’s fragile economic recovery.
Trade unions called on the government this month to increase taxes on the highest earners and postpone spending cuts, while industry groups urged a reduction in public-sector spending.
Members of the opposition party said the recent strike announcements threatened to “drag us back to the 70s and the dying days of the last Labour government.” Strikes by public-sector workers left rubbish piling up on streets in the late 1970s in what became known as the “winter of discontent,” helping Margaret Thatcher and the Conservative Party into government.
“As the country struggles out of recession, the last thing we need is the unions holding the country to ransom,” the Conservative Party minister, Theresa Villiers, said Friday, according to the BBC.
Such fears of large-scale strikes remain unrealistic for now, but the strike plans by British Airways and Network Rail workers “do show a hardening of attitudes particularly in the transport industry,” Howard Wheeldon, strategist at BGC Partners in London, said. “It has to be seen as bad news for the government.”
The Department for Transport on Friday called on British Airways, Network Rail and the two unions to continue talks. Analysts estimated the two strikes would cost British Airways about £105 million, or $159 million, and hurt the airline’s brand as customers book flights with competitors.
In advertisements on Friday, British Airways said that “a significant” number of cabin crew members were opposed to the strike and would help minimize disruptions to customers’ travel plans.
The airline plans to use volunteer crews and rented planes, and to serve cold food or offer no choices of vegetarian or children’s menus during flights to fulfill its pledge to allow as many passengers to fly as possible.
All long-haul flights leaving Gatwick Airport in London and more than half of the short-haul flights from the airport are expected to operate as usual. The airline predicts more disruptions at Heathrow Airport, its main hub airport, where about 60 percent of long-haul flights are to operate but only a third of short-haul flights.
Q1: Do you think if these strikes of British Airways and Network Rail are rational?
Q2: Will these strikes threaten the economy of England?
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