This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx /-------------------- advertisement -----------------------\ Explore more of Starbucks at Starbucks.com. http://www.starbucks.com/default.asp?ci=1015 \----------------------------------------------------------/ British Airways and Unions Settle Costly Labor Dispute July 31, 2003 By HEATHER TIMMONS LONDON, July 30 - British Airways and its trade unions said today that they reached a settlement over a dispute that led to a wildcat strike. After 10 days of negotiations, the airline - which is in the midst of a cost-cutting program to eliminate 13,000 jobs - has agreed to give its administrative staff a 3 percent pay raise retroactive to January. The staff has agreed to an identification system that, by Sept. 1, will keep track electronically of the hours they work. The system was unpopular with members of the check-in staff, who feared that it was the first step to split shifts or sending employees home early when lines were short. But British Airways has assured its three unions, the General Municipal and Boilermakers union, the Transport and General Workers Union and Amicus, that the card system will not affect their work hours. It has also agreed to discuss changes it is considering in working conditions with unions and employees. Unions and management have been discussing the pay raise for six months. British Airways would not quantify its cost, but a spokesman said it did not expect the raise to be material to earnings. Today's agreement is "good news for our customers, staff and shareholders," Mervyn Walker, British Airways's director of Heathrow, said in a statement. Sir Bill Morris, the lead negotiator for the Transport and General Workers Union, called the agreement a "good day for B.A. employees, a good day for the company and an even better day for passengers." The agreement came after an unofficial strike by counter agents that disrupted the travel plans of about 80,000 British Airway customers. On July 18 and 19, hundreds of British Airways counter agents walked off the job at Heathrow, halting the airline's operations there. More than 500 flights were canceled, and British Airways bookings have suffered since as travelers chose other airlines. Virgin Atlantic said last week that its bookings had more than doubled since the British Airways strike, and that it had to enlist extra call center workers to cope with the extra demand. Analysts estimate that the walkout will cost British Airways about £30 million ($48.5 million). "Labor swings an enormous club in the airline industry because of the high fixed costs in the business," David Strine, an analyst at Bear, Stearns, said. "If you disrupt operations for just a day or two, you can do enormous damage to the company, and to customer relationships." The damage comes during an already tough period for the airline industry. On Thursday British Airways is expected to report a loss for the quarter ended June 30 that analysts say could be anywhere from £50 million to £95 million, because the Iraq war and the threat of SARS cut travel plans. The wildcat strike, which was neither condemned nor condoned by unions, highlighted the schism between British Airways management and its employees. Many other airlines, and even some divisions within British Airways, already use the swipe card system to keep track of employee hours. The walkout was the most "radical move" employees could have picked, said Chris Tarry, an independent airline analyst. British Airways management will need to keep a closer eye on employee morale, but the company has no choice but to push ahead with its cost-cutting plans, analysts said. "The world doesn't owe anyone a living anymore," Mr. Tarry said. British Airways's cost-cutting plans are "not gratuitous scare tactics," he added. "The problems in this industry are huge." http://www.nytimes.com/2003/07/31/business/worldbusiness/31AIR.html?ex=1060659468&ei=1&en=4d33956ac277a930 --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! Click here: http://www.nytimes.com/ads/nytcirc/index.html HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company