BA pilots accept pay cuts to help the cash-strapped airline.

The British Airline Pilots’ Association (BALPA) has negotiated a draft pay and productivity package with British Airways (BA), to commence 1 October 2009, in order to assist the airline during its current difficulties.

The package will mean a basic pay reduction of 2.61% for BA pilots from October, and a 20% cut in flying time allowances. However, the deal should generate annual savings of over £16 million for the airline.

The package also allows for up to 78 voluntary pilot redundancies as a result of the changes to productivity, though there will be no compulsory redundancies.

In exchange, pilots will benefit from a “groundbreaking long term incentive scheme”, that will mean in 2011 pilots will be eligible to receive BA shares worth £13m, as long as certain company targets have been reached. If they hold on to these for three years (until 2014), they will be free to either sell or hold on to them, potentially making a solid profit should share prices rise during the period. 

Jim McAuslan, BALPA General Secretary said: “This is a unique agreement. We have always said that as a union we would share the pain if our members shared the gain.

“Our research indicated that BA is facing a real business challenge and this is not the case of the employer crying wolf.”

Earlier this week, BA sent an email to 30,000 of its workers asking them to volunteer for between one week and one month’s unpaid leave or unpaid work (with the lost salary spread over three to six months). Chief Executive Willie Walsh had set a precedent for his staff by forgoing one month’s salary of £61,000, in a bid to help the airline survive the downturn it is facing.

Echoing sentiments of BA’s recent request, Mr McAuslan added: “BA pilots by themselves will not deliver the change needed to see BA through this downturn. We hope that everyone in the company will do their bit so that we all come through fit to thrive in this toughest of markets.”