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London - British Airways fiercely defended its position in a dispute over pay and conditions to shareholders at its annual general meeting on Tuesday.
"The board's patience with BASSA has now been exhausted (...) We will win the right to manage," chairperson Martin Broughton told shareholders, referring to a long-running dispute by members of BASSA, the cabin crew branch of trade union Unite.
The Unite union, which represents 90% of BA's 12 000 cabin crew, handed out letters to shareholders on their way to the AGM on Tuesday, asking them to stop the dispute which has cost the company £150m.
Some shareholders heckled BA management at the AGM, accusing the company of "feathering its own nest at the expense of shareholders," and questioning whether chief executive Willie Walsh should move on.
Walsh said cost-saving measures such as reducing cabin crew on aircraft saved £42m in the last financial year and expects annual savings to amount to £62.5m.
"I don't do that to be popular, but to ensure BA is viable for the future. It's not nice to be depicted as Hitler or the devil but do I lose any sleep over it? Certainly not," Walsh told reporters.
Walsh believes the dispute will be resolved but the airline is training temporary staff so it can guarantee all long-haul flights and up to half of short-haul flights in the event of a strike.
Reassurance
BA management attempted to reassure shareholders about the company's future by being optimistic that Spanish airline Iberia will approve BA's £3.7bn pension deficit recovery plan by late September, paving the way for a planned €8bn deal to create the world's third-biggest airline.
If shareholders approve the plan in November, the merger could be completed by the end of the year, Broughton said.
International Airlines Group, the new holding company, will be Spanish registered with its primary listing on the London Stock Exchange and a UK head office.
BA's trading environment remains harsh but is showing improvement from last year's depressed levels, Broughton said.
The company is aiming for a 6% revenue growth and to break even at the pretax level this year.
In May, BA posted a record £531m full-year loss due to industrial disputes, recession and winter snow. It was BA's largest annual deficit since it was privatised in 1987 and follows a £401m loss last year.
The current industrial dispute started when BA decided last November to cut cabin crew pay and reduce staffing levels on flights to save £62.5m a year.
Cabin crew have until July 20 to vote on BA's latest offer, which includes two years of guaranteed rises in basic salary from February 2011, in addition to annual incremental pay rises.
However, a sticking point in talks between the airline and Unite has been BA's removal of travel perks from striking staff.
- Reuters
