The real issue at BA

On Monday British Airways lost 2 executives as a result of an internal BA probe into price fixing. The press as usual, and the BBC (see yesterday's post below) have decided that BA has a huge case to answer and will be fined up to £1 billion.

This is nonsense, even if guilty of carte lbehaviour in cargo and surcharge flights, a fine will only apply to a small fraction of BA's operations, meaning that even the maximum fine would be considerably less, perhaps £30 million at most. This would still be the largest fine ever for a UK plc. Nonetheless, with profits at over £650 million for the year, BA could swallow this. It is not as if the firm pays a dividend to shareholders anyway.

The real issue for BA are the BA Pension talks, the Unions have taken a hard line as expected and they really do want £1 billion put into their staff pension fund. This would hugely hamper one of the only truly successful major carriers. Why? Well BA needs to upgrade its ageing fleet and this will be hampered if debts are increased massively instead to pay the pensions.

I have blogged on the state of our pensions before and here I wanted to put the case from the other side for a change. BA is a successful business and employs 40,000 people, threatening it with Union action over pensions is very destabalising and do we really want the company share price to fall enough that it attracts a bid from Emirates?

Unions, Management and Staff need to be realistic about the future and come to a sensible compromise.