BA warns workers of strike 'damage'

British Airways today warned thousands of its baggage handlers, check-in staff and other workers that if they take industrial action in a row over pay it would "seriously damage" the company.

British Airways today warned thousands of its baggage handlers, check-in staff and other workers that if they take industrial action in a row over pay it would "seriously damage" the company.

The airline urged its employees not to support any campaign of industrial action because of the implications for the business.

Members of the GMB are voting on whether to strike and the Transport and General Workers' Union is expected to announce soon that it is also balloting its members.

The unions have rejected a three-year pay offer worth 8.5 per cent or 10.5 per cent if it does not count towards pensions.

BA's director of operations Mike Street said in a personal letter to staff today that talks with the unions were continuing.

He spelt out the pensions deficit facing BA which he said had led to the company's contributions rising by £133 million.

"This is not a short-term problem that will be fixed by a rise in the stock market.

"To put our total pension contribution into context, it represents more than last year's pre-tax profit of £230 million. No other UK aviation company faces the scale of this challenge."

Mr Street said BA expected its revenue to increase by between 2 per cent and 3 per cent so the airline was determined to control its costs and was aiming to save £300 million from employee costs over the next two years.

"We must carry on lowering costs if we are to be competitive and prosper.

"Our employment costs are already among the highest in the industry. If we do not have a competitive cost base we will not survive."

Mr Street added the first pay option was worth 2.5 per cent, backdated to January, with rises in line with inflation over the next two years worth a total 8.5 per cent.

The second option, which was non-pensionable, would give 2 per cent and half a week's pay in year one with further rises in line with inflation as well as extra money on top.

"The offers I have outlined represent what the company can sensibly afford to pay given our escalating pension contributions and our need to focus on lowering costs."

Mr Street said BA could not meet the union's pay claim which the company said was worth an estimated 14.5 per cent over three years.

He added: "Let me be absolutely clear. Industrial action within British Airways would cause significant and serious damage to our company in terms of our reputation for customer service, our finances and ultimately our future."

Talks between the two sides were due to continue today at the conciliation service Acas.