Simon Calder: My predictions for a winter of discontent

Saturday 31 October 2009 01:00

Check the date. Two months from tonight, we will mark the end of the first decade of the 21st century: the most tumultuous 10 years in recent history, and especially so in the travel business.

Could you do with one more trip? A good price is guaranteed in November and early December. You can celebrate the fact that, even with tomorrow's increase in Air Passenger Duty, average fares to most destinations are lower than they were a decade ago. But as anyone contemplating a flight on British Airways will recognise, booking a flight is not the same as being there, especially when disruption is threatened.

This week BA's cabin-crew unions said they would ballot members on industrial action over its long-running conflict with management. Yet despite headlines this week such as "BA passengers face Christmas of strike delays", travellers should remember the wartime admonition to Keep Calm and Carry On.

With only 61 travelling days to 2010, allow me swiftly to outline the root of the dispute. BA's cabin-crew costs are way above those of its rivals. To compete in the turbulent new world, the airline says it must subtract one senior cabin crew member from each flight to and from Heathrow. And when BA is in a position to recruit cabin crew once more, the new lot will be employed on much less generous terms.

Stewards and stewardesses are not naturally inclined to crew the barricades in the manner of militant trade unionists; a shop steward is usually the chap who wheels the duty-free trolley. But many cabin crew who have contacted me over the past week believe the chief executive, Willie Walsh, has rejected their ideas for cost-savings and is dismantling a top-quality airline that commands a premium from discerning travellers.

How will the dispute affect your travel plans? Given the venue for next Monday's mass meeting, Sandown Park racecourse in Surrey, these are my predictions for the runners and riders.

Going Postal, 5-4 on: an odds-on favourite is that the dispute will escalate. Soon after the mass meeting, the unions will send a one-page fax to British Airways announcing a ballot. Even in these online days, it must be conducted by post. Because cabin crew are scattered across the globe, and Royal Mail is hardly a model of harmonious efficiency, the closing date is likely to be around 20 November. Add time to count the large majority voting for a strike and to plan the subsequent walk-out, and you can expect the details of industrial action unions to be made in late November.

All Out, 2-1: previous experience suggests the strike will be timed to inflict maximum damage to BA's earnings from business passengers. These days, no union (except perhaps those in France and Italy) wants to be blamed for wrecking people's holidays; conversely cabin crew are unlikely to incur much public wrath by inconveniencing high-flying bankers. So my best guess is that the first 48-hour strike will take place in early December, with threats of the same again to follow.

Changing Planes, 11-8: immediately the strike dates are announced, British Airways will contact every passenger whose trip is likely to be affected which includes those booked for long-haul trips on either side of the strike days inviting them to change flights without penalty or obtain a full refund. Neither option is helpful for people who have to travel on particular dates: while the British have more choice than other travellers, fares on rival airlines are rising steadily thanks to the ABBA effect, as passengers book on Anyone But British Airways.

Adding Up, 50-1: besides the intangible cost in goodwill, British Airways can reckon a two-day strike will add another 50m to this year's losses. The City will regard the lost cash as a worthwhile investment if it allows BA dramatically to reduce its cost base and prosper in the most competitive travel market on the planet.

Could we profit from 'ABBA' effect?

How will the BA dispute finally end? In tears, I fear. The airline's willingness to weather a strike will trump cabin crew's reluctance to concede that their gold-plated days were numbered once easyJet started up.

In the meantime thousands of travellers will have their plans disrupted but you could profit thanks to the "ABBA" effect.

Many passengers, and their travel agents, have adopted the principle of "Anybody But British Airways" until the dispute is settled. A whiff of unrest is enough to drive travellers into the armrests of easyJet, BMI and Virgin Atlantic. Due to the extra demand, fares on those airlines will rise. Conversely, BA tickets will be priced down because of the risk of a strike.

When the dispute ends, BA's forward bookings are likely to be well down on where they ought to be, so the airline will need to stimulate the market by offering some very low fares. If you plan to fly near or far in the first three months of the New Year, you might want to wait a while to grab a bargain.

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