BA cost-cutting talks hit crisis point

Crucial talks aimed at reaching agreement on cutting costs at British Airways, including thousands of job losses, appeared to be heading for a breakdown today, with time running out on reaching a deal.

The airline has set a deadline of today for approving cost savings, including around 3,500 job cuts, after reporting huge losses of £401 million last year.

Unions and the company agreed not to comment on the talks, but a source told The Press Association that unless there was a last minute breakthrough, they would end in disagreement.

It is believed there were a number of sticking points, including a serious disagreement over the outsourcing of jobs and concerns over the prospect of compulsory redundancies and well as arrangements for consulting unions over job losses.

Unions are also understood to have offered to agree changes on a temporary basis until the economy and the airline's prospects improved, but BA is believed to want permanent changes.

The unions have called a meeting of senior shop stewards at the Renaissance Hotel near Heathrow airport later today to review any progress made at the talks.

Pay cuts were agreed with leaders of BA pilots earlier this month, but talks have continued for the past few weeks with unions representing other groups, including cabin crew, baggage handlers and check-in staff.

If the talks break down without agreement today, any dispute could lead to a ballot for industrial action which would threaten disruption during the busy summer period.

Union leaders were angered last week when BA announced that almost 7,000 staff had applied for voluntary pay cuts, including 800 who said they will work unpaid for up to a month.

Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work by June 24, which the company said will save up to £10 million.

Chief executive Willie Walsh, who has already announced that he will work unpaid for the month of July, said: "This is a fantastic first response. I want to thank everyone who has volunteered to help us pull through this difficult period."

Unions accused the airline's managers of bullying staff into signing up, a charge denied by BA.

Officials said staff were pressured by email to accept one of the options or face a meeting with a British Airways manager.