British Airways CEO defends work-for-free policy

Unions criticized the carrier for bullying workers into the program.

By
June 30, 2009 10:10
2 minute read.

 
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Willie Walsh, the chief executive of British Airways PLC, on Monday defended his call for employees to work for free for a month, after unions criticized the carrier for bullying workers into the program. BA revealed last week that almost 7,000 staff among its 40,000-strong workforce had applied for a voluntary pay cut in response to the airline's plea as it seeks to lower costs after the global economic crisis led to a slump in traveler demand. Walsh led the way, declaring he would not draw a salary for the month of July (£61,250). The carrier said the subsequent response from workers to take unpaid leave, work part-time or carry out unpaid work would save the company up to £10 million. But the UNITE union said workers were sent intimidating e-mails from senior managers that the union believed put pressure on staff to volunteer. Walsh said he had made it clear to staff that he was in a privileged position, acknowledging that his own promise to forgo a month's salary would cause him "little pain." "I made it clear to people I wasn't asking them to do what I have done," he said at a conference at the London Business School, noting that the loss of a month's salary was far greater to others. "What I was expecting people to do was stand back and ask themselves what they can do to help in a time of need, what they can do to make a difference." Unions and other critics also have suggested that Walsh has played up the current crisis to better negotiate pay deals. British Airways reported a record loss of £375m. for the year ending March 31, and Walsh has been more openly pessimistic than his colleagues about the state of the airline industry. In an e-mail to workers this week he warned that the airline was "definitely at risk" if they heeded calls by trade unions to reject the call for voluntary pay cuts. On Monday, he noted that the airline industry is projected to lose some $9 billion this year after losing $10.4b. last year. And this year's forecast is based on an average oil price of $56 a barrel, which Walsh described as optimistic. Oil prices jumped above $70 on Monday as Nigerian militants damaged and partly shut down an offshore oil platform belonging to Royal Dutch Shell PLC. "This is the most challenging environment we have ever operated in," Walsh said.

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