BA ask 40,000 staff to work for nothing.

vivatifosi

My DH works for BA. He would be willing to forego some of his pay to help the airline, he understands the situation they are in. However as I'm not Mrs Willie Walsh, it would be very hard to do this in one hit as Walsh is. Much better that staff take a 10% paycut over a year, or work three months on two thirds pay.

setmefree2

Generali wrote: »

The trouble is that with airlines, like cars, there is too much supply and Governments are happy to subsidise output making the problem worse.

So true. Airlines are going to lose 9 billion dollars this year AND pump massive amounts of CO2 into the atmosphere. Crazy.

http://uk.news.yahoo.com/18/20090608/tbs-global-airlines-to-lose-9-billion-do-5268574.html

setmefree2

molerat wrote: »

This just goes to prove that senior management do not live in the real world. Yes the big man is going to work for nothing but if it all goes well (and probably even if it doesn't) what will he get at the end of the year ? The menial levels that are struggling to pay mortgage, rent, loans etc will be hit where it hurts but to the directors this will be a minor inconvenience. If it all goes belly up the big bosses will just move on.

And with oil moving ever upwards it's not as if the situation is temporary, is it?

wolvoman

molerat wrote: »

This just goes to prove that senior management do not live in the real world. Yes the big man is going to work for nothing but if it all goes well (and probably even if it doesn't) what will he get at the end of the year ? The menial levels that are struggling to pay mortgage, rent, loans etc will be hit where it hurts but to the directors this will be a minor inconvenience. If it all goes belly up the big bosses will just move on.

So it will be better if the airline folds and all 40,000 lose their jobs?
Which is it to be?

Tozer

setmefree2 wrote: »

And with oil moving ever upwards it's not as if the situation is temporary, is it?

No but very likely to have hedged when the oil price was much lower.

setmefree2

wolvoman wrote: »

So it will be better if the airline folds and all 40,000 lose their jobs?
Which is it to be?

It's not an either or, is it? Surely, they just need to get smaller... I know that one of the problems is Heathrow slots. Airlines fly planes out of Heathrow empty to keep slots - totally inefficient.:o

Generali

setmefree2 wrote: »

It's not an either or, is it? Surely, they just need to get smaller... I know that one of the problems is Heathrow slots. Airlines fly planes out of Heathrow empty to keep slots - totally inefficient.:o

One of many incredibly stupid things about airlines and more especially Governments policies towards them that make them act in stupid ways.

setmefree2

Tozer wrote: »

No but very likely to have hedged when the oil price was much lower.

Good point. I think that BA charge way too much for a business seat particularly in this climate...

Generali

Tozer wrote: »

No but very likely to have hedged when the oil price was much lower.

Why would that be? It's not feasible to hedge a long way forwards as the costs of the hedge become too expensive.

According to their results to March 09, BA made a small loss for the quarter on their fuel hedge, that is to say that (presumably) the average price at which they hedged was slightly higher than the average fuel price for the quarter.

My guess is that they decide not to take 'a view' on future market conditions, instead they aim to smooth out fluctuations in fuel prices using hedging to do so and so allow them to set future ticket prices with more confidence.

BA's results:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjYxN3xDaGlsZElEPS0xfFR5cGU9Mw==&t=1

Tozer

From what I hear, most airlines took the view that the price of oil was unlikely to fall much below recent lows and took out hedging on that basis to avoid the big losses suffered last time oil was $100+