British Airways Strike: Part Two.

British Airways Strike: Part Two.


On the 12th February I attempted to understand how, and why, the union Unite lost its court case to  allow a strike. Yesterday, the first of a number of projected strikes finished. This time there was no legal delays. Nearly half of BA’s flights did not fly over the weekend. Although BA does not accept Unite’s figures.


Unite’s union leader attended a meeting of strikers at Heathrow, where some hundreds of cabin crew booed when a BA flight took off. More strikes are possible from 14th April. Sympathetic unions in America and Europe have promised action in their own airports to support Unite.


Currently there is a standoff, with no new negotiations planned. Who will win this dispute? What would count as winning?


For BA winning would be a new flight of aircraft with lower fares, fewer cabin crew on lower wages; effectively competing with other low cost airlines. We have been here before with “GO”! Go was a previous BA low cost set of planes. It was deemed a success, but was sold off. So BA knows practically how to achieve this.


For Unite winning would be to stop the move to lower wages. Put differently, it wants to stop BA wage levels dropping to the level of other low cost carriers.


What is at risk here is BA’s reputation as the national carrier, traditionally paying more than the competition; especially to pilots. BA’s task here is very complex as there are a number of different unions involved; with much rivalry between them.


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Royal Bank of Scotland £10 million bonuses!

Royal Bank of Scotland Bonuses of £10 Million in shares.


Nine bankers in RBS got £10 million worth of shares. Of these one banker got nearly £6 million. In 2009 RBS made a loss of £3.6 million, which was down from the 2008 loss of £28 million. This announcement was made after the stock exchange closed on Friday 5th March.
The bank offered 3 justifications for these bonuses.
Justification One: This level of bonuses will keep the "good people" who will help to eventually repay the £54 billion of tax payers money back to the government.
Justification Two: Thousands of the best staff have already left in the last year to other banks.
Justification Three: The treasury will get a windfall of about £25 billion from taxing these bonuses. This creates the possibility of full repayment within 2 years.

The new rules over bonuses state that anyone earning over £39,000 per annum cannot get bonuses as cash. Instead payment is in shares which have to be held for years before being cashed. Further, they are subject to clawback under certain conditions. The Chief Executive Officer was offered, and refused, £2.4 million in shares. 
All this presents a plausible picture for enriching a small number of employees at, or near, the top in the bank. But it raises some questions.


Firstly, how do those who remain in the bank after thousands of the good people have left, become good themselves? Is there any training in the bank? Is there any increase in pay for those less good, and lower down in the hierarchy?
Secondly, given the 84% control the government has over RBS, did the government know of the above details before the bank published them? Did the government give explicit approval? Will other shareholders in the bank approve? 

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