Pilots' union backs away from battle with British Airways over OpenSkies airline

British Airways has avoided suffering potential losses and disruptions to its service after its pilots dropped a threat to strike over the launch of the group's new OpenSkies service next month.

Shares in BA jumped nearly 5 per cent as industry watchers said that the strike action was "dead in the water" after the British Airline Pilots' Association (Balpa) withdrew its High Court action over whether BA could prevent a strike occurring at all. BA welcomed yesterday's decision.

The announcement came on the day the tickets for OpenSkies, which flies from the European mainland to the US, went on sale for the first time. The first flight, from Paris to New York, departs on 19 June.

Balpa's members overwhelmingly voted for industrial action in February over fears the airline aimed to outsource the jobs to non-BA pilots. BA invoked Article 43 of the Treaty of Rome, which blocks the right to strike under certain circumstances.

The union went to the High Court earlier this week to rule on whether BA could invoke Article 43 in this case. It issued a statement that announced its decision to withdraw from the action yesterday during the cross-examination of its BA branch chairman.

Jim McAuslan, the general secretary of Balpa, said: "After three days in court, it became apparent that win, lose or draw we could still face appeal after appeal. Balpa has built financial reserves to take action like this, but we will do so wisely. This is why we have decided to withdraw our request to the court."

The union also accepted in court that the ballot in support of industrial action had expired and gave an undertaking not to pursue any future ballot on the same issue.

Yet the union is set to launch a European Union-wide campaign in an attempt to change the law. It wants to remove any doubt that Article 43 in no way undermines the right to strike. It plans to lobby MPs, MEPs and the International Labour Organisation to its cause.

BA said that the withdrawal "represents acknowledgement by the union that the creation of our subsidiary, OpenSkies, poses no threat to the jobs, pay or conditions of mainline British Airways pilots".

The UK flagship carrier said it had guaranteed in January that OpenSkies would not be used to worsen the terms and conditions of BA mainline pilots. "These guarantees remain in place," it added. "We are proud of the professionalism and high reputation of our pilots. We never wanted or sought a conflict with them."

This will come as a relief to BA at a testing time for the airline industry, as well as its own disastrous opening of Terminal 5 at Heathrow. Last week, the chief executive warned the group would sharply increase fares because of the rising price of fuel.