British Airways pilots called for a strike ballot after unions rejected the latest pay package from management. IAG SA, owner of the airline, reversed earlier gains to fall as much as 1.3%.
“We are urgently considering next steps and will make a further statement later this week,” Brian Strutton, general secretary of the British Airline Pilots Association union, or Balpa, said in a statement.
British Airways faces a coordinated campaign for bigger salary increases from pilots, cabin crew and ground staff in a challenge to its efforts to beat down costs. The Unite and GMB unions also rejected the airline’s three-year offer, as the labor groups seek to agree the first-ever joint pay deal with BA.
Members of Balpa voted against the pay proposal of an 11.5% rise over three years and approved a formal strike ballot, the union confirmed to Bloomberg. Salaries haven’t reflected profit gains following a drop in oil prices starting in 2014, the union said, while claiming that company morale has suffered from higher density seating, paid-for food on shorter flights and cuts to back-office staff.
IAG traded 0.3% lower at 467.40 pence as of 4:23 p.m. in London, after rising as much as 1.2% earlier.
British Airways has been pushing through cost cuts to fend off discounters including EasyJet Plc in Europe and Norwegian Air Shuttle ASA on long-haul routes. IAG reported an operating profit of 135 million euros ($153 million) during the first quarter, compared with steep losses at competitors like Deutsche Lufthansa AG and Air France-KLM Group.
British Airways’ offer was “fair and generous” while the airline remained open for discussions with all trade unions, a spokeswoman for the carrier said. “We believe our pay and benefits for pilots are among the best in the industry.”
Unite, Balpa and GMB “stand ready” to consider a revised proposal from BA, the labor groups said in a joint letter to members. The current three-year labor agreement expired at the end of last year as talks dragged on.
