British Airways is refusing to offer pilots and other staff a new three-year salary package, citing an uncertain post-Brexit outlook in proposing a 12-month agreement instead.
“We can agree a one-year pay deal,” the IAG-owned airline said in a letter to unions obtained by Bloomberg News.
“This gives certainty over pay for colleagues in what is anticipated to be an uncertain year given the current trading conditions,” the letter said.
The proposal, which includes a below-UK-inflation pay increase of 2.3%, comes as businesses across Europe brace for the UK’s withdrawal from the EU on March 29 and a lack of clarity over any economic fallout.
With time running out and no divorce deal reached, companies are making contingency plans from stockpiling goods to rescheduling production lines.
“We are working closely with our unions to take a positive approach towards our ongoing pay talks,” British Airways said in a statement.
The letter provides insight into British Airways’s outlook for the coming year as the aviation industry tries to understand what the UK’s pending exit from the EU will mean for demand, regulation and ownership restrictions.
Plans to avoid a halt to international flights to and from the country have already been laid out, but uncertainty persists about Brexit’s wider economic impact.
BA’s pilots, who took a pay cut during the financial crisis of a decade ago to help the carrier navigate the economic downturn, are frustrated that rising profit under IAG hasn’t fed into salaries, according to a letter from three unions in response to the airline. IAG also owns Aer Lingus, Iberia, and Vueling.
They rejected the counteroffer as “unacceptable,” and asked for a three-year deal starting with a 5% pay rise in the first year, plus profit-sharing.
- the unions said.
Three labour groups, including Unite, GMB and the British Airline Pilots’ Association, represent cabin crew, engineers, check-in staff and pilots.
The airline “is well placed to withstand the worst that might be thrown at it in terms of negative economic circumstances”.