British Airways improved a pay offer for ground staff today in an effort to avert a planned 24-hour strike that threatens a repeat of last summer's chaotic scenes at Heathrow airport.
On top of an existing pay offer of an 8.5% rise over three years, BA said it would offer staff a series of bonuses for good attendance. Those absent for 16 days or less between now and September 2006 could bonus payments of up to a total of £1,000.
Unions, however, said it did not mean the threat of a strike later had been averted as they prepared for further meetings to consider the offer.
The airline said its offer met the union demands.
"The unions have been asking us for 14.5% over three years. This offer meets that claim," said Mike Street, BA's director of operations.
Ed Blissett, the national officer of the GMB union, said it was too early to respond to the offer and that talks would continue this afternoon. BA is negotiating with three unions representing more than 10,000 check-in staff, baggage handlers and other employees to try to negotiate a solution to a long-running pay dispute.
Members of the GMB union are threatening to strike for 24 hours on August 27, 28, 29 or 30, a long holiday weekend, unless the airline raises its offer of an 8.5% over three years. The outcome of a vote by more than 8,000 members of the larger Transport and General Workers Union (TGWU) will be known later this week. The unions are expected to coordinate any strike action.
Last summer, BA was hit by a wildcat strike over the introduction of swipe cards. That stoppage cost the airline £40m, forced it to scrap 500 flights and disrupted travel for more than 100,000 people.
A 24-hour walkout by check-in staff could cost BA £10m and the company would also have to count the cost of fewer future bookings if it failed to avert strike action, analysts said.
Barclays Stockbrokers said the latest threat of industrial action had come at the worst time for the airline, which is already wrestling with higher pension costs, increased landing charges and record oil prices. Last week BA doubled its fuel surcharge on long-haul flights. Mike Powell, an analyst with Dresdner Kleinwort Wasserstein, estimated that BA would lose £10m for each strike day on the basis that it would have to shut down 60% of its network. But if its contingency plans failed to keep more than 20% of its network in operation, then the cost could rise to £15m, he said.
Mr Powell added that agreeing to union demands would leave a considerable dent in the BA's profits.
"The difference between BA's position and the union's position is about £20m in additional staff costs," he said.
Barclays said more passengers were expected to fly with BA this year because of price-cutting, which is expected to lead to a 2-3% increase in revenues. But profits will depend on the success of a drive to eliminate £300m of staffing costs and future oil prices.
"We suspect that the outcome may be some compromise to avert a strike but this may mean higher-than-expected labour costs, so the forecasts will come under pressure," Barclays said.
BA last week posted profits of £115m in the three months to June 30 - up from its Iraq war-related losses of £45m in 2003.
