The impact of British Airways on us, Brentford and QPR

[Plodder]

Three points.
The 43k BA employees excludes pilots, but includes cabin crew (about 17k).


Some older (in terms of length of service), so called legacy cabin crew earn between £70-90k p.a. and BA can get new cabin crew for comfortably under £20k.   I'm not saying it's right but if you were BAs financial controller, what would you do?

The cabin crew (don't know about other staff) union is Unite, who I understand (so may be wrong) are declining to engage in discussion with BA but have circulated members a truly (IMO) amateurish, snide and unhelpful template letter for members to send to Alex Cruz, BA's CEO.

From where do you get the figure of 70-90K for legacy cabin crew?  I find that hard to believe. I suspect someone has found an outlier (e.g. one employee who has done an exceptional amount of overtime or got stuck on a lot of grounded aircraft in the course of a year).  I simply don't believe that figure is typical of cabin crew salaries. I get a lot of flak at work and in my private life for having voted Conservative at the last election, which shows I am no Dave Spart, and I don't uncritically believe everything Unite puts out, but the silence of BA makes me suspect that these proposals are being seriously considered. If so, BA is behaving very badly over this, compared with other business owners who have sacrificed much to keep their employees in work and paid.  If I were BA's financial controller, I might consider how much better paid cabin crew have contributed to the health of the company balance sheet, and what damage it could to the company's finance, quality of serive and reputation to take on a lot of people at less than £20K per annum.

[Southcoastffc]

Three points.
The 43k BA employees excludes pilots, but includes cabin crew (about 17k).


Some older (in terms of length of service), so called legacy cabin crew earn between £70-90k p.a. and BA can get new cabin crew for comfortably under £20k.   I'm not saying it's right but if you were BAs financial controller, what would you do?

The cabin crew (don't know about other staff) union is Unite, who I understand (so may be wrong) are declining to engage in discussion with BA but have circulated members a truly (IMO) amateurish, snide and unhelpful template letter for members to send to Alex Cruz, BA's CEO.

From where do you get the figure of 70-90K for legacy cabin crew?  I find that hard to believe. I suspect someone has found an outlier (e.g. one employee who has done an exceptional amount of overtime or got stuck on a lot of grounded aircraft in the course of a year).  I simply don't believe that figure is typical of cabin crew salaries. I get a lot of flak at work and in my private life for having voted Conservative at the last election, which shows I am no Dave Spart, and I don't uncritically believe everything Unite puts out, but the silence of BA makes me suspect that these proposals are being seriously considered. If so, BA is behaving very badly over this, compared with other business owners who have sacrificed much to keep their employees in work and paid.  If I were BA's financial controller, I might consider how much better paid cabin crew have contributed to the health of the company balance sheet, and what damage it could to the company's finance, quality of serive and reputation to take on a lot of people at less than £20K per annum.

In my post, I've tried to show where I have an opinion, or make a non factual observation (viz IMO, I understand etc).  So, forgive me if I don't quote privileged information. That said, here's something from the press recently  (despite my previous post saying don't believe all you read in the papers!😊
"
British Airways' cabin crew are facing a pay cut of up to 75 per cent amid a coronavirus pandemic that has brought airline travel to a virtual standstill, it is claimed.

It is said that the salaries of standard flight attendants will be cut to £24,000 a year and senior crew would have to downgrade to the level of basic crew, leaving staff "appalled"."     £24k is 25% of.........?

[Oakeshott]

"They can just tweak the job title/description."

Let's see. The relevant law is the Emplyment Rights Act 1996 and the definition of redundancy is in section 139.

"Redundancy.

(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—

(a) the fact that his employer has ceased or intends to cease — (i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business - (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish."

That clearly (and appropriately) would enable BA to make staff redundant if they conclude that the volume of business will be materially lower for the short and medium term (quite likely, I'd have thought), but not to make everyone redundant and then offer essentially the same jobs with, for instance, different, titles. Just as the Bard said re roses, so a 747 pilot is a pilot, even if BA wanted to retitle him or her.

Fortunately, as in all branches of law, there are real experts out there who can be brought in should the union (or an individual) wish.

[Riversider]

I have a friend who works for BA on their long haul flights.  It's not 12,000 though SCFFC, it is 43,000, the entire workforce.  People can then apply for their old jobs back but they are only taking on 31,000 at hugely reduced salaries, in my friend's case a 55% reduction.  Win win for the airline if experienced crew want to do so, if not they will no doubt look to employ people with no experience on even lower wages. 

Spot on, so back to my original point, what will be the effect of this on Fulham, Brentford and QPR ?

[Statto]

I have a friend who works for BA on their long haul flights.  It's not 12,000 though SCFFC, it is 43,000, the entire workforce.  People can then apply for their old jobs back but they are only taking on 31,000 at hugely reduced salaries, in my friend's case a 55% reduction.  Win win for the airline if experienced crew want to do so, if not they will no doubt look to employ people with no experience on even lower wages. 

Spot on, so back to my original point, what will be the effect of this on Fulham, Brentford and QPR ?

The one fan we've got who works for BA and had to take a pay cut will move from a nice seat at the front of H2 to a restricted view seat twelve rows back

[Jims Dentist]

On top of the above there is a strong chance that income tax/NI will go up?

[H4usuallysitting]

Everything is going to be different...from the house market to visiting friends....my job is going to be more challenging with all the road closures and more people either working from home or unemployed....there will be less money circulating as less people moving around.

It's not going to be fun, recessions never are....this one will also have Covid19 lurking in the background..

People will think twice about a capital expense (I already am), and not just because of financial uncertainty

[Twig]

I have no insight into what BA and/ or Unite are planning to do so, no comment. Although I am expert in some of the law around redundancy etc., but don't intend to go there.

On the wider issue I do think that in addition to the obvious short term impact of Cov 19 there will also be medium to long term changes in society.

Employers' have clearly become more comfortable with staff working from home and that can materially reduce expensive office costs. I foresee a long term change to patters of working for a significant minority if the workforce. And I wouldn't be investing in a property REIT that was too dependent on income from commercial premises!

I do think taxes, both direct and indirect, will have to increase. If you couple this with reduced investment performance in the form of dividend cuts then we will all be less well off for years to come (and I suspect some pension funds may be at risk too!). That means less disposable income.  Couple that with a fear of crowded spaces (rational or not) and we may see reduced uptake on season tickets and smaller attendances at football and other big events.

Motorists have reduced their mileage and there are far more cyclists on the road, of course car miles will increase again but the green lobby has been given a great opportunity and I suspect governments will be keener to invest in cycle and pedestrian infrastructure going forward (as well as public transport).

Some of the long term effects of this virus may be a bit subtle but I don't agree that the world will quickly return to a carbon copy of 2019.

[Statto]

Some of the long term effects of this virus may be a bit subtle but I don't agree that the world will quickly return to a carbon copy of 2019.

I'm not treating this post as directed specifically at me but nonetheless should say FWIW I don't believe we'll "return to a carbon copy of 2019".

IMO the virus will essentially just accelerate some things a few years. Most of its victims have been people that wouldn't have been with us beyond next Christmas, and in the same way, most of the commercial victims will be businesses with outdated business models who wouldn't have been around for much longer. I've been banging on for years about the pointlessness of commuting, and also how unethical and pointless it is to spew tonnes of carbon into the atmosphere flying to Prague for the weekend, when all people do when they get there is speak English, eat McDonalds and learn less about the place than they could have learned from the internet at home. So a change in attitudes to offices and air travel, among other things, was already on the cards IMO.

But I do think that by early next year, social distancing will be a distant memory, the property market and consumer spending will be back to normal/"2019" levels, people will still take several holidays per year, and the tube, pubs, football stadiums etc will be as full as they ever were

[Oakeshott]

Except that I would have used "many" rather than "most to start the third sentence, I agree with you. The impact of the internet on shopping, decreased reliance on fixed working places and a growing recognition that some forms of transport, especially air travel, need modification to improve air quality were all evident prior to the virus and its effects will either accelerate them or in the case of transport, provide an opportunity for sensible government initiatives. (And despite regular evidence to the contrary, I do not think the term "sensible government initiatives" is intrinsically a contradiction in terms.)

The one opportunity that the present crisis seems to me not capable of being substantially grasped is the move to electric cars. Current ones can deliver decent range, but the prices are far too high for hard pressed owners of fourteen year old Honda Civics like me to contemplate, even if the UK matched the kind of subsidies the French Government is now apparently offering! Neither is the charging infrastructure well enough developed.

[Twig]

Some of the long term effects of this virus may be a bit subtle but I don't agree that the world will quickly return to a carbon copy of 2019.

I'm not treating this post as directed specifically at me but nonetheless should say FWIW I don't believe we'll "return to a carbon copy of 2019".

IMO the virus will essentially just accelerate some things a few years. Most of its victims have been people that wouldn't have been with us beyond next Christmas, and in the same way, most of the commercial victims will be businesses with outdated business models who wouldn't have been around for much longer. I've been banging on for years about the pointlessness of commuting, and also how unethical and pointless it is to spew tonnes of carbon into the atmosphere flying to Prague for the weekend, when all people do when they get there is speak English, eat McDonalds and learn less about the place than they could have learned from the internet at home. So a change in attitudes to offices and air travel, among other things, was already on the cards IMO.

But I do think that by early next year, social distancing will be a distant memory, the property market and consumer spending will be back to normal/"2019" levels, people will still take several holidays per year, and the tube, pubs, football stadiums etc will be as full as they ever were

My points weren't aimed specifically at you to anyone else Statto. I was simply trying to point out that some of the structural, economic and social changes wrought by the virus are unlikely to be undone soon or in the foreseeable future. I agree that we may see the return of consumer spending and holidays although I think it will be in the context of a fairly tough recession. I certainly agree about the return of the property market, this is dictated by limited supply on our small island.  Where the economy is concerned I think the big elephant in the room is equity returns, share values will recover somewhat (although the oil majors have taken a fearful hit), but dividend yields will not. The latter is going to be a headache for pension fund managers for years to come and could see yet further diminishment of the generosity of company funds. Vast numbers of ordinary people are not well provided for in old age, they rely heavily on their pensions to look after them and I fear we could be looking at a big increase in the grey poor.

[Statto]

Some of the long term effects of this virus may be a bit subtle but I don't agree that the world will quickly return to a carbon copy of 2019.

I'm not treating this post as directed specifically at me but nonetheless should say FWIW I don't believe we'll "return to a carbon copy of 2019".

IMO the virus will essentially just accelerate some things a few years. Most of its victims have been people that wouldn't have been with us beyond next Christmas, and in the same way, most of the commercial victims will be businesses with outdated business models who wouldn't have been around for much longer. I've been banging on for years about the pointlessness of commuting, and also how unethical and pointless it is to spew tonnes of carbon into the atmosphere flying to Prague for the weekend, when all people do when they get there is speak English, eat McDonalds and learn less about the place than they could have learned from the internet at home. So a change in attitudes to offices and air travel, among other things, was already on the cards IMO.

But I do think that by early next year, social distancing will be a distant memory, the property market and consumer spending will be back to normal/"2019" levels, people will still take several holidays per year, and the tube, pubs, football stadiums etc will be as full as they ever were

My points weren't aimed specifically at you to anyone else Statto. I was simply trying to point out that some of the structural, economic and social changes wrought by the virus are unlikely to be undone soon or in the foreseeable future. I agree that we may see the return of consumer spending and holidays although I think it will be in the context of a fairly tough recession. I certainly agree about the return of the property market, this is dictated by limited supply on our small island.  Where the economy is concerned I think the big elephant in the room is equity returns, share values will recover somewhat (although the oil majors have taken a fearful hit), but dividend yields will not. The latter is going to be a headache for pension fund managers for years to come and could see yet further diminishment of the generosity of company funds. Vast numbers of ordinary people are not well provided for in old age, they rely heavily on their pensions to look after them and I fear we could be looking at a big increase in the grey poor.

Is it the end of the world if those who've been living off dividends have to sell some of the underlying shares? Not much point clinging on to long-term investments in old age anyway... Although I accept it would be nicer to be spending it on a yacht or new Jag rather than the basic cost of living

[Plodder]

Re pensions, those in their late 50s and early 60s who are in defined contribution schemes may have to delay their retirements, as dividends yields plunge (e.g. banks are pausing dividends), unless they are prepared to accept a much lower pension than anticipated and become the "grey poor" to whom Twig refers.

[Oakeshott]

Apparently LBC have been getting a lot of calls from BA employees. They have an employment law expert on from 9.00 this evening and the suggestion is that the questions about BA's plans (or what employees, correctly or incorrectly believe are their plans) will be answered by the expert.