Pilots union Balpa’s BA members walked out over 9-10 September in a dispute over pay and conditions. The union believes IAG has failed to adequately reward BA pilots for the part they have played in the group’s record £3 billion profits.
A second strike scheduled for 27 September was later called off, but not before BA had already begun to revise its flight schedule to mitigate the impact of the walkout.
Ahead of the action earlier this month, BA warned the strikes would likely cost the airline around £40 million a day.
In a trading update issued on Thursday morning (26 September), IAG chief financial officer Steve Gunning revealed the Balpa action led to the cancellation of 4,521 BA flights over a seven-day period.
Some 2,196 flights were reinstated resulting in an eventual 2,325 cancellations. The net financial impact, said Gunning, would run to an estimated €137 million (£121 million).
However, Gunning added further effects in the quarter, including the threat of strikes by Heathrow airport employees, resulted in an additional financial impact of €33 million (£29 million).
“Booking trends” in IAG’s low-cost segments, affecting its Vueling and LEVEL airlines, would also result in a hit of around €45 million (£40 million).
“IAG therefore expects its 2019 operating profit before exceptional items to be €215 million lower than 2018 pro forma [€3.49 billion],” said Gunning.
On negotiations with Balpa, Gunning said there had been “no further talks” between BA and the union.
“The airline’s [BA’s] offer of a 11.5% pay increase over three years still stands and has been accepted by British Airways’ other unions, representing 90% of the airline’s employees,” said Gunning.
“Clearly any further industrial action will additionally impact IAG’s full year 2019 operating profit.”
