BA plans 40% pay cut for regional cabin staff

British Airways is proposing to cut the pay of cabin staff based at regional UK airports by up to 40 per cent in a further acceleration of the company's drive to slash global costs by pounds 1bn and cut 5,000 jobs.

Details of the pay cuts, which will affect many of the division's 600 staff, are outlined in a management document called "British Airways' future for BAR", which has been obtained by the Labour Party.

It says BA's pay rates will have to match the "market rate" offered by some lower-cost airlines.

One example given is a purser with 17 years' service who would have a pay rate of pounds 19,359 cut to pounds 14,550, a drop of 25 per cent. In another case, a steward or stewardess with up to 10 years' service and earning pounds 12,191 would get a new salary of pounds 7,920, a reduction of 35 per cent.

The longest-serving cabin staff, with as much as 25 years with the company, would suffer a 36 per cent pay drop from pounds 15,443 to pounds 9,992.

Other changes would include more flexible shift patterns and lower overtime pay. In compensation, staff would be offered lump sum payments of between pounds 6,000 and pounds 15,000 depending on seniority.

The cash saved from the pay cuts would be used to buy new aircraft to replace Boeing 737s which would not meet proposed European noise standards. The document says the savings are necessary to fulfil BA's target of a 17.3 per cent return on its assets.

It continues: "This will mean that we can pay our corporation tax, meet our shareholders' expectations and buy our new aircraft."

It makes clear that if the cuts are not achieved, BA will franchise the services to other airlines. It concludes: "Failure to do so will entitle BAR to purchase these services elsewhere or BAR may decide to close, sell, or franchise."

Brian Wilson, head of Labour's campaigns unit, said: "What was surprising was how little these people were paid in the first place. The idea that cuts in the wages of low-paid employees are the means of buying new aircraft is certainly a novel way to run an airline."

BA last night confirmed that pay cuts had been proposed, though no figures had been agreed. The company said the staff consultation process had just begun.

Last week, BA made the first step in its cost-saving drive by announcing the closure of its ground handling unit at Heathrow Airport. The 750 staff employed by BA Contract Handling were offered voluntary redundancy payments.

Bob Ayling, chief executive of BA, said part of the reason for the closure of the operation, which provided check-in, cargo and baggage handling services for 25 other airlines at Heathrow, was because it could not make a profit at current rates of pay.