Thursday12 September 2019 ★ FINANCIAL TIMES 15
COMPANIES
TA N YA P OW L E Y, DAV I D K E O H A N E ,
A R C H I E H A L L A N D B E T H A N STATO N
Pilots who are striking atBritish Air-
ways rebetterpaidthanattheirbudgeta
rivals but appear to be less well remu-
nerated than their main European com-
petitors, according to a Financial Times
analysis.
A starting basic salary for a BA cap-
tain is about £75,000, according to
Balpa, the pilots’ union. BA said the
average salary for a captain was
£167,000, with £16,000 of flight allow-
ances on top of this. The airline has
claimedthepayriseithasofferedwould
take average captain salaries to more
than£200,000.
In comparison, the starting salary for
captains at German rivalLufthansa si
€144,000, which rises to €170,000 with
additional flight hours and profit shar-
ing. Top-level captains earn a fixed sal-
ary of about €240,000, rising to
€285,000 with the additional pay bene-
fits.
AtAir France, the average salary for
long-haul captains is €230,000, which
does not include benefits, bonuses or
profitshares.
UK budget carriereasyJet aid its UKs
captains earned an average of £120,
and a maximum of £145,000.Ryanair’s
pilots can receive up to £170,000,
accordingtothelow-costairline.
Sector commentatorssaid pilot pay
was difficult to compare across airlines.
Pay varieddependingontheseniorityof
the pilot, but airlines alsooffered differ-
entbonusesontopoffixedsalaries,such
as flight allowances, food and housing,
andprofit-shareschemes.
Andrew Lobbenberg, aviation analyst
at HSBC, said: “The devil is in the detail,
and there’s really a lot of detail because
pilot contract structures are a science in
themselves. Plus there’s the exchange
ratetofactorin.”
At the centre of thedispute is the
demand for a profit-share scheme.Pil-
otsaredisgruntledthatcomparablecar-
riers such as Lufthansa, Air France and
KLMgiveaproportionofprofit opilots.t
A BA captainwith the airline for more
thanadecade aidpilotswerefrustrateds
that they had taken cuts to help the
business “rebuild” after thedownturn
but were not sharing in its recovery. In
2009 BA suffered losses of £400m and
faced a drop in demand for air travel
because of therecession. Now it is mak-
ing money again — with an operating
profit of €2.7bn last year — and pilots
wantaslice.
Another pilotsaid: “I’ve flown with
other airlines, and the most unhappy
employees I’ve flown with are at BA.
Many of the older pilots are very upset.
They’ve had new rostering sys-
tems... given up [holiday] leave, and
seenalotofchange.”
TheBAcaptaindescribeditas“enrag-
ing” thatthe group wasunwilling to
shareprofits, calling it “corporate
greed”. Hesaid: “I think our hand has
been forced. The underlying issues have
beenbuildingforquiteafewyears.”
Balpa, alongside the Unite and GMB
unions that represent the rest of BA
staff, said it had asked for a profit share
schemethatwouldresultin7percentof
operating profit going to workers. BrianStrutton, general secretary, said other
European airlines had schemes that
were much more generous. Profit-shar-
ingisalsocommonatbigUSairlines.
BA has offered arise of 11.5 per cent
plus a 1 per cent bonus, an offer that the
other unions representing ground staff,
cabincrewandengineersaccepted.
Several industry analysts said it was
fair for BA ilots to ask for a sharep
of profits. “Profit-sharing aligns labour
interests with shareholders,” Mr Lob-
benberg said. “For airlines, operating in
a cyclical industry, it also offers a form
of cushioning against downturns. US
carriers have embraced this concept, as
they increased pay for pilots after the
salary reductions applied in Chapter 11
[bankruptcy protection] during the
financialcrisis.”
Andrew Charlton, managing director
of Aviation Advocacy, said airline staff
had been “patient” as carriers had gone
“through massive restructuring” over
the past decade. “It wouldn’t be seen as
inappropriate that some of the profit is
shared. It’s certainly true that airlines
havetobeferociousoncostsatalltimes.
Themarginsaresotiny.
“On the other hand, failing to operate
for the last two days isn’t good for the
bottomlineeither.”
BAappearstobestandingfirm.Itsaid
it believed its pilot salaries were “com-
petitive, and on average we receive five
applications from pilots working for
competitor airlines for every pilot posi-
tion at British Airways.” It also noted
that42 per cent f Balpa memberso
joined BA after the 2008crash, so “they
did not make any financial sacrifices.
Since then, the aviation industry has
becomeevermoregloballycompetitive.
“We have had to make some difficult
decisions to create the strong financial
platform we now have, and which pro-
vides stability for our entire workforce,
includingpilots.”
John Strickland,aviation consultant,
said that while BA was a strongper-
former for parent IAG,there were
uncertainties uch as Brexit, intenses
competition, and an order book that
means itmustkeepstrict controlon
costs. “People look at airlines like BA
andlookatthembeingprofitable,butin
the airline industry, business can be
quickly hit by unexpected events or
downturns. The airlines that make it
havecashinthebanktoseeitthrough.”Airlines. egacy carriersL
BA caught in pay storm over profit sharing
Union points to higher rates
at some rivals, but comparing
contracts is not always easy
Virgin Atlantic as stepped up calls onh
the government to reform the way take-
off and landing slots are allocated atan
expanded Heathrow,with a report
highlighting the lack of competition on
some routes out of the UK’s biggest
airport.
The study by WPI Economics,
commissioned by Virgin, found around
one in four passengers flying from
Heathrow only had the option to fly
withInternational Airlines Group, the
owner of British Airways, which this
week saw almost all of its BA flights
grounded in a 48-hour pilot walkout.
The report estimates that IAG
operated 77 monopoly routes out of
Heathrow this summer.
IAG is Heathrow’s biggest customer,
operating more than half of all take-off
and landing slots. The next largest
groups areLufthansa ith 8 per centw
and Virgin Atlantic/Delta with 7 per
cent, according to the report.
Virgin has been campaigning for a
change to the way slots are allocated toensure there is more competition when
Heathrow expands with a third runway.
The UK government is expected to
publish its aviation strategy white paper
this year, which should include
proposals for the reform of the slot
allocation process.
“Expansion provides an opportunity
to totally rethink how we allocate take
off and landing slots to enable the
creation of a second flag carrier that can
compete,” said Matthew Lesh f theo
Adam Smith Institute. “Consumers need
competition to ensure that disruption to
one airline doesn’t destroy travel plans.”
Virgin said that it was “essential” that
Heathrow expansion led to “effective
competition that delivers for the whole
nation and this simply cannot be
achieved by the continued dominance
of one airline group”.
However, IAG said that Virgin had
had the opportunity over the past two
decades to increase its slot share at
Heathrow by buying slots on the
secondary market.Tanya PowleyMonopolies
Virgin
calls for
Heathrow
take-off
reformBA has offered pilots an 11.5% rise
and 1% bonus, which other staff
took. Some analysts say profit
sharing would align pilots with
investors —Darryl Brooks/Dreamstime£75,
Starting basic
salary for a BA
captain, according
to the pilots union€144,
Pay Lufthansa
captains start on.
The highest-paid
earn €240,Legal Notices
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