Cost cutting is vital for survival, says BA chief
Tuesday 14 July 2009
The boss of British Airways today spelled out his determination to achieve a "fundamental" change to employment costs as he warned that the airline was in the "eye of the storm", battling against the recession.
Chief executive Willie Walsh told the company's annual meeting in London that he wanted to achieve 3,700 job losses by next March on top of 2,500 which have gone since last summer.
"There is no point trying to skirt around the fact that we need a fundamental and structural change to our employee cost base.
"These changes are essential to our short-term survival and, more importantly, to our long-term viability."
Mr Walsh said talks, which are continuing with trade unions to achieve the job losses and agree a pay freeze, were delivering some "very positive" results but he warned unions that he was not exaggerating the difficulties BA faces.
"We have pulled no punches. It is essential for our short-term survival and long-term viability that we secure permanent change in our employee costs."
BA chairman Martin Broughton said the aviation industry was facing the biggest crisis it had ever known and he warned that the market for premium air travel may never fully recover.
He told shareholders that BA made an operating loss of more £300 million in the final quarter of the last financial year, the worst quarterly result in its history.
"This is no ordinary aviation downturn. This is no cyclical swing that will automatically turn up again."
Mr Broughton also warned that the deficit in BA's pension funds is likely to have worsened by more than £1 billion in the last year.
The company has paid £1.8 billion into its two pension schemes in the past three years - more than its profits.
"The deficits remain huge and, in the current climate, the company will not be able to afford to increase its own contribution."
Despite BA's financial problems, Mr Broughton said the company remained opposed to state aid for airlines and took a swipe at Virgin boss Richard Branson, who had raised the issue recently.
"We should not be too critical of Richard Branson. After all, he is rather worried about his own airline and he knows quite a lot about subsidies because he's been welcoming them into his train operations for years."
- 1 Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
- 2 Cyclist in Russia narrowly misses being hit by car and lorry
- 3 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 4 What are your fingerprint words?
- 5 Gary Lineker involved in Twitter row after presenter rubbishes claims he will be warned by BBC over foul-mouthed tweets
Rihanna 'nude pictures' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
Jennifer Lawrence: Leaked 4Chan sex video branded 'fake' by users
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...