British Airways set to enter day two of crippling pilot strike

A pilot strike at British Airways wiped out all but a handful of flights on Monday and is set to continue for a second day in the absence of talks between the union and management over a pay dispute.

The unit of IAG SA is preparing to cancel almost all of its Tuesday timetable, amounting to more than 1,600 departures and arrivals. The carrier said it had “no option” but to scrap close to 100% of Monday’s planned services, operating just five flights during the day, three of them staffed by management pilots. BA has estimated the labor action could cost about £40 million ($49 million) a day.

IAG’s labor woes could even get worse. Spanish union UGT told BA sister unit Iberia that it will call a strike of ground workers, saying the airline broke off talks on a revised collective agreement. IAG shares fell by as much as 3%.

With the British Airline Pilots’ Association union planning another walkout on Sept. 27 in addition to Tuesday, BA Chief Executive Officer Alex Cruz told the BBC its cockpit crews had been offered a deal that would have lifted remuneration 11.5% to 202,000 pounds, including benefits, making the pilots among the best paid in the world.

Balpa General Secretary Brian Strutton disputed the figures and said that most union members at BA will earn far less. The union put the cost of settling the strike at 5 million pounds, “one-eighth of the cost of just one day’s strike action.” The pilots are seeking “a share of record profits just as they shared the pain in the bad times,” Strutton said.

The strike took hold at airports including London Heathrow, normally Europe’s busiest hub.

While the disruption hit hardest in London, where BA operates from its twin hubs at Heathrow and Gatwick, the outages extended to other locales such as Edinburgh. London City, popular with business travelers, isn’t affected as those flights are operated by the CityFlyer affiliate.

The strike is the company’s first involving pilots since 1979 and threatens the travel plans of customers at the tail end of the busy summer season. Affected passengers have been rebooked on other airlines where possible, offered alternate dates to fly, or been given refunds. About 195,000 customers were affected by the action.

Pilots vowed to go ahead with the strike following a breakdown in talks over a new contract. BA accused Balpa of not acting in good faith by making “an eleventh-hour inflated proposal” which the airline said would cost an extra 50 million pounds. The pilots argue that BA has ignored reasonable proposals for higher wages and improved benefits and that their demands amount to a fraction of that sum.

The pilots have “consistently offered up chances for the company to negotiate a way forward,” Strutton said in an email Sunday, adding: “British Airways must now put the needs of its staff and passengers first and accept that its pilots will not be bullied or fobbed off.”

BA sent an email warning pilots that strikers will lose generous travel perks for themselves and their families for the next three years, the FT reported. The airline has issued “various threats” which suggest BA has no intention of helping to defuse the situation, the pilots said in their statement.

The current demands relate to pay, profit sharing, and a share-awards program, and come after cockpit crew took salary cuts in the wake of the 2008 financial crisis to help bolster the airline’s finances, according to the union.

IAG reported an 18% jump in profit in the first quarter led by earnings at BA, the best performance by a European airline in the period.

The union called for the action after mediated talks with management at the state-backed Advisory, Conciliation and Arbitration Service ended without a deal. Cockpit crews voted to strike by a 93% majority in a poll in July.

Balpa is also campaigning at Ryanair Holdings Plc, where U.K. pilots plan to walk out for an additional seven days. Five days of strikes failed to disrupt schedules or bring the discounter – which uses many non-unionized pilots on contract – back to the bargaining table.