BA cabin crew warned not to expect much in annual pay review

British Airways' 13,000 cabin crew have little to hope for from the pay review at the end of this month, chief executive Willie Walsh has warned.

Preliminary discussions have taken place with Unite, the trade union that represents the flag carrier's in-flight staff, and so far no specific numbers have been formally put forward by either side. But with an eye on falling inflation, Mr Walsh is setting expectations low.

"Retail price inflation (RPI) was down to 0.9 per cent last month and the pay deal would typically be RPI or something close to it," Mr Walsh said.

There were threats of industrial action last time BA entered pay negotiations with its cabin crews – who form the biggest single group of the airline's workforce. In 2007, BA's settlement terms on pay, sickness and staffing issues were met with hostility by the unions, who represent around 90 per cent of BA crews, and an agreement of a 4.8 per cent rise over two years was only reached the day before the first scheduled one-day walk-out.

Last time around, although the cut-off date was October, no agreement was struck until January. At least some delays are to be expected this time too. Serious negotiations are yet to begin and any deal is unlikely to be in place by the official deadline on 31 January.

BA will have little difficulty making a case for minimal wage rises. Traffic figures for December are down 3 per cent year on year, including a massive 12 per cent drop in premium passengers, as the company battles what Mr Walsh described in last autumn as "the worst trading environment the industry has ever faced". The carrier has already cut 480 managerial positions, some 35 per cent of the total, through a voluntary redundancy scheme.