Thousands of British Airways cabin crew voted to strike, hours after the airline revealed a 3.7 billion pound ($6 billion) hole in its pension fund that will require deft handling by management if a proposed merger with Iberia is to stay on track.
"The strike will take place over 12 days from December 22 but we have taken the decision, which will disrupt the travel plans of thousands of people, with a heavy heart," a Unite spokesman said at a press conference following the result of the ballot at Sandown Park Racecourse, west of London. "Of the staff balloted 92.5 percent voted in favour of industrial action."
Shares in BA, which have fallen 9 percent in the last three months, were 1 percent down at 199.40 pence by 1435 GMT, valuing the business at around 2.3 billion pounds. The Unite union balloted some 13,000 cabin crew members on industrial action as part of a dispute over job losses and changes to working practices.
BA wants three quarters of its crew to accept a pay rise of between 2 and 7 percent this year, which will be frozen next year, and for 3,000 staff to switch to part-time working, along with a reduction in onboard crewing levels on some flights from London Heathrow.
"A 12-day strike would be completely unjustified and a huge over-reaction to the modest changes we have announced for cabin crew which are intended to help us recover from record financial losses," BA said in a statement. The strike will disrupt the travel plans of hundreds of thousands of passengers and could cost BA around 50 million pounds in lost revenues and refunds, analysts say. BA's chief executive Willie Walsh has said changes at the airline, which analysts believe is losing 1.5 million pounds a day, are essential to help repair its precarious finances.
The company last month reported a first-half pretax loss of 292 million pounds, and is expected to report a loss of 601.2 million pounds for the full year, according to a Thomson Reuters I/B/E/S poll of 19 analysts. Earlier on Monday BA said its pension deficit more than doubled to 3.7 billion pounds at the end of March, from 1.8 billion a year earlier, at the high end of analyst expectations, but not seen as big enough to derail a merger with Spain's Iberia.