UK Trades Union Congress (TUC) announced British Airways and cabin crew union, Unite, failed to reach an agreement on their final day of talks on 10-Mar-2010. TUC stated both parties will now be reflecting on the position but at this stage no further negotiations are planned. Unite stated BA rejected a “fresh offer”, which would deliver savings of GBP63 million (Bloomberg/BBC News, 10-Mar-2010). Details reportedly included a 2.6% pay cut this year, lower staffing levels on some services and allowance reductions. However, the carrier stated it requires cabin crew pay cuts of GBP1,000-2,700 p/a, and that its own proposals would save it GBP32.5 million. British Airways stated it remains open to negotiations (Associated Press, 10-Mar-2010). [more]
British Airways and Unite negotiations fail to reach agreement; no further talks planned
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British Airways' decision to exit its only secondary Chinese route to Chengdu, in Jan-2017, might suggest the music is ending and the secondary long haul bubble is popping. There is added colour given the recent UK-China air service agreement expansion, and Brexit/British pound depreciation overhangs.
BA's exit does confirm market fundamentals: secondary city yields are low, and some routes are ahead of their time. Yet a number of factors unique to British Airways suggest caution in concluding that BA's Chengdu exit could foreshadow other withdrawals.
Brexit follow-up Part 2: European airlines feel yield pressure; long-term impact unknowable
Part 1 of CAPA's Brexit follow-up report assessed the ASK exposure of UK and non-UK airlines to market segments where existing traffic rights could potentially change once the UK finally leaves the European Union. This second part reviews recent comments by leading European-listed airlines on how they see the impact of Brexit, both in the short term and in the longer term. Most of them acknowledge that there are considerable uncertainties, while simultaneously insisting that they will not be significantly affected in the long run.
There have been two initial impacts on airlines. First, Brexit has added to economic uncertainty, thereby muting demand and lowering yields. The magnitude and duration of this impact is unpredictable. Secondly, the consequent weakening of the GBP has made outbound international travel from the UK more expensive and less appealing, and lowered the value of GBP revenue earned by airlines.
The longer term impact will depend on whatever new traffic rights regime is negotiated between the UK and the EU. As a number of the airlines have acknowledged, this remains unknown and is, indeed, unknowable until the UK formally triggers its exit from the EU and then completes its two-year exit negotiations.