Lufthansa deal puts pressure on BA negotiations

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The Independent Online

British Airways is to come under increased pressure to increase its pilots' pay, following a lucrative deal between German pilots and their employer, Lufthansa, to end a series of strikes last month.

Due to a worldwide shortage of pilots, many airlines have recently been forced to renegotiate improved pay packages. Pilots throughout the US and Europe have been striking over pay and conditions in recent months, causing chaos at airports around the world.

Balpa will start discussions with its members next month to decide what pay and conditions it will be asking for, when it starts negotiations with BA at the end of the year.

But the extra pressure will come at a bad time for BA. In the back of company executives' minds will be its cost-cutting programme and a downturn in the number of flights being taken this year.

"When you look at what happened in the US and at Lufthansa, it doesn't bode well for a modest increase [in pay] at BA. But the pilots will probably look at the specific situation at their own company and they may have to go for modesty," said Martin Borghetto, an airline analyst at Morgan Stanley.

This week pilots at Lufthansa will begin voting on a deal forged between their union Vereinigung Cockpit and the airline. The outcome will not be known for three weeks, although it is expected that it will be accepted.

Under the deal, the pilots will get a 10 per cent pay increase this year, plus bonuses linked to the company's performance. Some commentators have said the increase in Lufthansa's costs for pilots pay will be 30 per cent.

Andrew Light, airlines analyst at Schroeder Salomon Smith Barney, said: "There are negotations due for a number of airlines this year regarding pilots pay. When there's a lot of pilots' pressure, wages tend to go up. But the airlines' financial results are getting worse so there's no appetite for managers to pay up for airline pilots at the moment."

Lufthansa isn't the only European airline to be hit by industrial action. Next week pilots at Spain's largest airline, Iberia, are expected to start a series of 24-hour strikes. They are protesting at a six-year wage freeze, that was imposed to bring the company out of debt. Alitalia, the Italian airline, has recently suffered from strike action.

Last year the US company United Airlines was hit by pilots' action and eventually increased wages by almost a half. Pilots at Comair, a commuter carrier of Delta Air Lines, have also recently struck a deal with their bosses following over 80 days of strike action.