The long-standing dispute between British Airways and its pilots could have taken an unexpected turn in favour of the airline with the collapse of Thomas Cook
on Monday 23rd September 2019. The British Airline Pilots’ Association (Balpa) have long been demanding increased salaries from the airline in recognition of the vast profits declared in recent years. Whilst talks continue to falter, 93% of Balpa members voted in favour of a 2-day strike action on 9th and 10th September 2019, grounding 1,700 flights at an estimated cost to the airline of at least £140m. Further strike action was due on 27th September, however that has recently been called off by Balpa and yesterdays developments seem unlikely to help their cause.
Why might Thomas Cook collapse be good for BA and bad for its pilots?
1. More pilots available
Thomas Cook employed approximately 600 pilots across its bases, all of whom, as of Monday 23rd September find themselves unemployed. That’s an awful lot of highly skilled airline pilots dumped into the employment pool in a single day. British Airways pilots strongest hand for demanding higher wages was a case of simple economics in supply and demand. There were few qualified pilots able to fly its planes and so those that did, could, within reason, set their pay demands. Something they tried and carried out strike action to push forward, however, something British Airlines has so far resisted. The availability of up to 600 transatlantic and short haul pilots looking for new jobs certainly hasn’t made that case any stronger from the BA pilots perspective.
2. Surge in demand for flights
All Thomas Cook flights and holidays have been cancelled and whilst most customer will have some form of recourse to get their money back, they will likely be looking to book another holiday or flight elsewhere. Price hikes have been widely reported in the media from alternative airlines and tour operators, however analysts have stressed that pricing is largely an automated process and is based on a simply supply and demand basis. Flights to Orlando
offered by Thomas Cook have been widely reported of jumping in price by over £1,000 for a family of four by other airlines that offer the same routes. Computer algorithms set prices to maximise profits and with one less competitor in the frame and a surge in demand, Thomas Cooks competitors appear well placed to make handsome profits on the back of their collapse.
Will BA pilots strike again?
It remains to be seen where talk will end up, however the 11.5% pay increase over 3 years that will result in some BA captains earning £200k a year has currently been rejected. Will the availability of up to 600 Thomas Cook pilots (and thousands of cabin crew) sway the argument in British Airways favour or will the pilots carry out the very real threat of a 10-day ‘mega strike’ proposed for November 2019?
Even the government has waded into the argument with no.10 urging both sides to “sort out” their differences and move forward in a constructive manner. It seems that political pressure is building on private travel firms with the management of Thomas Cook being heavily criticized for taking huge salaries from a failing company, whilst its share price collapsed and ultimately entered insolvency leaving thousands without jobs and customers without holidays. And for good reason, the UK government is due to foot the bill for the CAA repatriation flights at an estimated cost to the taxpayer in the region of £100m to bring back over 150,000 holiday makers. Codenamed Operation Matterhorn, the Civil Aviation Authority (CAA) has chartered 45 jets to bring UK holiday makers home.
Will BA employ Thomas Cook pilots and crew?
It’s highly likely yes, along with other airlines struggling to keep their staff happy, such as Ryanair who are rarely far from controversy, British Airways may well employ some Thomas Cook pilots and crew to alleviate pressure on their own staff, improve working conditions and use as a bargaining chip in the BA pilot dispute.