BA chief executive Walsh gives up six-figure bonus

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British Airways' embattled chief executive Willie Walsh is to forgo his £334,000 annual bonus for 2009 in the light of the group's record losses, the cost of the volcanic ash cloud and the on-going industrial dispute with cabin crews, the company said yesterday.

It is the second year running that Mr Walsh has given up his bonus, turning down more than £500,000-worth of share options in 2008.

BA is facing difficult times. The flag carrier last month reported record annual losses of £531m, even worse than the previous year's £401m black hole. The ash cloud debacle which last month closed swathes of European airspace for six days cost it an estimated £100m. And a string of cabin crew strikes has also cost it upwards of £100m.

Against such a background, Mr Walsh felt that turning down his bonus would be "the most appropriate thing to do," a spokesman said. BA's striking cabin staff returned to work yesterday after the last of three five-day stoppages in a dispute over pay and conditions stretching back over more than 12 months. Two earlier strikes, in March, cost the company £43m.

Acas, the conciliation service, is working to set up further negotiations between the two sides. But so far talks have ended in deadlock. And Unite, the trade union, has warned of plans to re-ballot members to establish a mandate for further industrial action over the summer.

Len McCluskey, the assistant general secretary at Unite, yesterday said there would have been "uproar" if Mr Walsh had not given up his bonus.

"There should be no bonus and no mega-pot of shares until BA sorts the cabin crew dispute," said Mr McCluskey, branding the ongoing dispute with cabin crews as the "ruination of a great British company".

Although there has been progress in the original row over staffing changes, a subsequent dispute over the withdrawal of travel perks for striking staff and allegations of bullying disciplinary measures has resulted in an increasingly acrimonious stand-off.

Mr Walsh expressed regret at the strike yesterday, but stressed the necessity of paring back on the group's costs.

"I regret that we found ourselves at loggerheads with very valued members of staff at a critical time," he said. "Without change, British Airways will just shrink and shrink and shrink. Because of the legacy structures we have in this business, we are increasingly unable to serve some popular destinations in our network profitably. We need profitable growth to make this business sustainable."

Thanks to contingency plans put in place to minimise the disruption, services flew as normal from Gatwick and London City last week, and 70 per cent of long-haul and 55 per cent of short-haul flights from Heathrow went ahead.

While forgoing his bonus, Mr Walsh retains his £735,000-per-year salary, which has remained at the same level since 2008, the company said yesterday. But he was only paid £674,000 last year, after giving up a month's salary as part of cost-cutting efforts that saw staff across the airline invited to take unpaid leave or switch to part-time working.

Keith Williams, BA's finance director, also worked without pay for a month last year. But Mr Williams is accepting his £167,000 share bonus for the year, on top of £403,000 basic pay. Mr Williams is one of the lowest-paid finance directors in the FTSE 100, BA said.