After decades flying high, Branson hits turbulence

As crew plan first ever walk-out, Simon Calder on what the dispute means for the airline

Twenty-seven years to the day after Virgin Atlantic's maiden flight, Sir Richard Branson's airline yesterday looked to be on the verge of its first-ever strike.

The British Airline Pilots' Association (Balpa) met to decide its next course of action after an overwhelming vote by flight crew in favour of a stoppage over pay. They agreed to postpone any announcement of industrial action.

No news, for most of the people affected by the Virgin Atlantic pilots' pay dispute, is bad news.

For passengers booked to fly with Virgin next month, it represents more uncertainty. Only those who will complete their journeys by 30 June – the first date that a strike could begin – can be confident their flight will operate.

Families booked to fly to Florida or beyond in July must wait to see how the dispute unfolds; until an agreement is reached or a stoppage is announced, they are unable to make alternative plans.

Balpa's position is entrenched: that Virgin's offer of a 4 per cent rise this year and 3 per cent in 2012 and 2013 is unfair.

"With inflation running at 5 per cent and likely to remain high, VA pilots would, if they accepted these increases, be in effect voting themselves years of wage cuts," it said.

Likewise, the airline has not moved from its statement that "the company has made a fair, affordable and sustainable offer that is in line with the rest of the industry and we continue to be open to dialogue".

Given the gulf between the two sides, the next move is likely to be the announcement of strike dates.

Balpa was careful not to say when it might reveal plans for industrial action. The union appears intent on giving Virgin the legal minimum of one week's notice of a strike, thereby limiting its ability to deploy contingency measures.

An announcement could come as early as today.

But Douglas McNeill, equity analyst for Charles Stanley Securities, said: "A strike isn't a foregone conclusion. Balpa is using the ballot to strengthen its hand in negotiations, knowing that if it comes to a strike it will have shot its bolt. But both management and unions will now find their options narrowing quite quickly."

The financial fortunes of Virgin Atlantic are sustaining extra damage with every day that uncertainty prevails. The airline's most profitable passengers are business travellers who tend to book late and pay the highest fares. Travel agents are understandably keen to steer their clients away from potential problems, and are already booking travellers on other carriers for journeys next month.

As an airline that has endured heavy losses from the financial crash, volcanic ash and snow at Heathrow, Virgin Atlantic can ill-afford to lose its premium passengers.

The main beneficiary of Balpa's decision to postpone is British Airways – which, coincidentally, yesterday reached a final settlement of its long-running cabin crew dispute.

What began two years ago as a row over changes to rosters, has dragged on through several ballots and two bouts of strikes, which have cost BA more than £150m.

Cabin crew belonging to the Unite union voted to accept a deal that will see staff travel privileges restored.

A British Airways spokesman said: "The skills and professionalism of BA cabin crew are second to none, and we are delighted this dispute is behind us."

During the course of the trouble, the airline pushed through many of the measures it sought, including a reduction of staffing on flights to and from Heathrow and the establishment of a "new fleet" of cabin crew on inferior terms and conditions.

Unite's general secretary, Len McCluskey, said: "We have reached an honourable agreement with BA. The overwhelming acceptance of this deal by cabin crew means that both parties can now move forward together on securing a bright future for the airline."

Virgin Atlantic said: "In the event that we are forced to amend our flight schedules we would be looking to secure alternative equipment and crews from aircraft leasing suppliers."

However, sourcing replacement long-haul planes in the peak month of July looks problematic. During the cabin crew strikes, BA chartered in only short-haul jets.

Virgin Atlantic has avoided strikes throughout its history. Early in 2008, two 48-hour stoppages were called by cabin crew, but the dispute was settled before any action took place.

The airline has endured a lean decade, effectively treading water with an ageing fleet.

Sir Richard Branson, the president of Virgin Atlantic, has made it clear that the airline is up for sale, but so far there is no evidence of a deal taking shape.

Q&A: what you need to know about the strike

When could a strike start?

Trade union legislation requires Balpa to give Virgin Atlantic a week's notice of any industrial action. If a stoppage were announced today, it could not begin until 30 June. The law also stipulates that any strike must begin within four weeks of the ballot result, that is, by 19 July.

How long might it last?

A prolonged strike seems unlikely. Airline operations are, as air-traffic shutdowns and snow at Heathrow have shown, susceptible to anything that interrupts normal operation. Even a two-day strike would cause widespread disruption, not least because planes and pilots would not necessarily be in the right places when it ends. A sequence of 48-hour strikes on different days of the week could severely damage the network, particularly on routes with only one or two services a week.

If I am booked to fly on a strike date, what will happen to my flight?

That depends on the airline's contingency plans, which it has not yet revealed. The impact will depend at least partly on your destination. Virgin Atlantic has three broad types of routes: prestige business services, such as New York, Hong Kong and Tokyo; high-end leisure routes, to California and the Caribbean; and mass-market flights to Florida. Non-striking pilots (about one in seven of the airline's 750 flight crew) are likely to be deployed to the highest-earning services. Destinations such as Los Angeles, with multiple daily flights, could have two departures combined. And the airline is likely to charter-in capacity to cover its Florida routes. But some passengers are likely to be offered only to postpone their trip or get a full refund.

Can I switch to another airline?

Not until strike dates are announced. Virgin Atlantic emphasises that its operations are continuing normally at present. Part of its contingency plans will involve switching passengers to other carriers, but that is most likely on links with plenty of capacity, such as Dubai and Nairobi. Were, say, the once-a-week 747 departure from Tobago to Gatwick to be grounded, BA could not possibly carry more than a fraction of the Virgin passengers.

My trip is booked with Virgin Holidays, not direct with the airline. Does this make any difference?

Yes. Indeed, any traveller who has a Virgin flight as part of a package – whether from Virgin Holidays or another operator – is in a strong position. The holiday firm has a duty to seek alternative transportation, or offer a full refund of the holiday cost. Travellers who have booked flights and accommodation separately, and who are unable to travel because of a strike, may not be able to recover the cost of their stay.

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