Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Analyst says strike could spell death for Bri -

View in ParlViewView other Segments

Analyst says strike could spell death for British Airways

Philip Williams reported this story on Wednesday, December 16, 2009 12:27:00

ELEANOR HALL: The walk out by British Airways cabin staff could leave up to a million travellers
stranded over the Christmas period. But according to one industry analyst the strike could also
spell the beginning of the end for the once iconic airline.

Thirteen-thousand cabin staff are set to stage a 12-day strike starting on the 22nd of December to
protest about cuts to staff numbers and conditions.

Aviation specialist Howard Wheeldon is a senior strategist at BGC Partners in London and he told
Europe correspondent, Philip Williams, that the strike could seriously damage the airline.

HOWARD WHEELDON: BA is in very serious trouble. We had hoped, although we'd anticipated the
possibility of a strike from the cabin staff for several weeks now if not longer. We've got to the
point now where the airline, if it does have a protracted strike, we're talking here of 12 days for
what may be only a first strike. That is going to lead to serious damage, underlying damage to the

Bear in mind we're talking here of an airline that is not only in serious financial trouble but it
also has a very long history of industrial relations problems. The customer only stays for so long.

PHILIP WILLIAMS: Of course all of this leaves perhaps a million people stranded. Not all of them
obviously are going to be able to find alternatives. What is the long-term damage do you fear to
this, what is really an iconic company here in Britain?

HOWARD WHEELDON: The long-term damage is that as costumers walk away and move away they lose any
trust or faith they have in this airline. The airline itself really begins to suffer at the bottom
line. Now it's suffering now.

It's suffering now partly through recession and a host of other problems such as a high cost base,
and it's only just got over a high cost fuel situation along with other airlines. So it's been
seriously weakened. It is not in a position to suffer another bout of extra weakness, that's the

PHILIP WILLIAMS: The beginning of the end?

HOWARD WHEELDON: Potentially this is the beginning of the end. Bear in mind this is an airline that
has a pension fund deficit of ?3.7 billion. That's double its net asset value and substantially
more than its market capitalisation.

So there is that liability there. That has to be sorted out. I think if this strike does go ahead
the damage could well mean that this is an airline that won't necessarily go under, I think it
could last for a long, long time yet, but it will be so damaged that it has to literally halve
itself in size.

ELEANOR HALL: Senior strategist at BCG Partners, Howard Wheeldon and he was speaking to our Europe
correspondent, Philip Williams.