British Airways merger plan poses new threat to workers

FRIDAY 13TH was the date BA and Iberia announced the details of their proposed merger. While the potential pay-off of a successful merger will prove very lucky for the bank balances of bosses at BA and Iberia it could well prove to be very unlucky for the workers at both companies.

Neil Cafferky

Under the proposed deal the merged company would be 55% owned by BA shareholders. The lash up between the two companies probably "signals a higher degree of confidence on the part of both carriers about underlying prospects," said Nick Cunningham, at Evolution Securities.

The deal is due to be finalised by February, however there is one potential stumbling block that could scupper BA's plans. Iberia could walk away from the deal if it reaches the "reasonable opinion" that the pension fund could be "materially detrimental to the economic premises of the proposed merger".

In plain English this means the company must reduce the amount of money it pays into the pension fund.

This fact must be borne in mind when considering the current offensive by BA management against the wages and conditions of staff .

Agreement threat

As The Socialist has previously explained, the centrepiece of BA's plan to reduce costs is to destroy the 1948 Redeployment Agreement.

In short this agreement ensures that wages and therefore pensions can never be reduced. Rather than scrap this agreement in one go, which would probably trigger company-wide strike action, BA intends to nibble round the edges and gradually do away with the agreement section by section.

The current plan to create a two-tier workforce among cabin crew is a case in point. BA intends to make 3,000 redundancies and set up a new fleet of cabin crew.

This new fleet will be on reduced wages and therefore pensions. Any promotion or redeployment from the old, better paid fleet will be into the new fleet on worse pay etc. This process will then allow BA to reduce the pay to cabin crew over a number of years.

Since cabin crew make up one-third of staff this will make a significant dent in BA's pension contributions and would put the company in a powerful position to use similar tactics against the rest of the workforce.

This plan of course is dependent on defeating cabin crew who are currently balloting for strike action, possibly in the run-up to Christmas.

There is a possibility that the threat of strike action will force BA to withdraw their impositions. However the pension issue will act to harden BA's stance towards cabin crew. For cabin crew there is also a hardening of the mood of defiance.

At the Unite union branch meeting of cabin crew there was much criticism of the decision by the national Unite leadership to abandon strike action over similar issues two years ago.

Although a deal averting strike action cannot be ruled out, the ground for compromise appears to be narrowing by the day.