British Airways in Administration?

[Garry Russell]

Reported

http://business.timesonline.co.uk/tol/b ... 543863.ece

Garry

[VC10]

If only

Paul
ex - British Caledonian employee who did one Yr with BA ( before I got out under the wire)

edit: Just to clarify, I mean no ill will to BA employees, just the organisation

[speedbird591]

Obviously, I've been following BA's problems very closely. I still get some inside info, read the papers and get BA News delivered weekly. Whilst BA is undoubtedly in serious trouble it's still a few months away from administration. If they don't tackle the outward cash flow it would take approximately six months before the size of cash reserves falls to the point where the banks would call in the administrators. A lot of the posturing at the moment is to gain bargaining position with the unions to negotiate permanent changes to contracts. The management are creating/utilising a classic business tool called 'A Burning Platform'. The image being that your present position is fast disappearing permanently and you must all jump together into a liferaft (of their choosing). It worked for Lord King in the early 80s and became a text-book business tool.

But everybody's making statements and getting in position. BALPA appear to have made a cosy deal with the management whereby they give up some pay on a temporary basis. This allows the company to put pressure on other areas to come to a deal. However other areas are being told their deals must be permanent. Willie is asking people to work or holiday without pay, as he has. But last year he and other directors awarded themselves a 38% pay rise and full bonuses because of the profits. Starting pay for cabin crew is only £11,000 and the allowances they earn are what makes the job practical, which is why they defend them as fiercely as an MP.

Branson has already been on the TV crowing about how he could buy BA but can't be bothered as its easier to wait until they fail and pick up the slots. But he wouldn't answer questions about Virgin's imaginative accounting that's already been ridiculed in the press. He's trying to talk people out of booking with BA to help bring about the failure. As of course is O'Leary who calls BA a pension deficit with wings.

There's a bit of truth in all of it but this high-stakes game has a lot more playable levels before 'game over'!

Ian

[bigred1970]

well its nice to know that we in the states are not the only ones that can't keep airliners in business...... but isn't BA partly state owned? or did it go private some time ago?

[Garry Russell]

Hi Ian

Walsh himself is the one who has said it is in administration :think:

Garry

[speedbird591]

You didn't get as far as paragraph three, Garry. I read this article the other day - it starts off with a possible scenario.

Ian ;-)

[Garry Russell]

I know there are scenarios reported but it did say he came out of the meeting saying it was in adminisration but perhaps he didn't mean it like that. I know about some of the recent events but have not been following it that closely and tbh I was supprised at this article because I had not had the impression things had got this far, bad as they may be it seems a bit of a jump so it may well not be what it appears hence my question mark in the title

Obviously to folks like yourself with more and inside information will have a much better idea of the reality where as all people like me get is media hype and even though things are said the context can be easily changed.......and usually is depending what message the reported wants to give :think:

Garry

[petermcleland]

It is a dreamed up scenario Garry:-

It was close to midnight when Willie Walsh finally emerged from Waterside, British Airways’ sprawling Heathrow headquarters. The airline’s chief executive blinked in the lights of the waiting television crews, cleared his throat, and started to speak, his voice trembling.

“I am sorry to say that despite our efforts today we have been unable to secure further funding from our banks. The cash drain we sustained as a result of the rolling programme of industrial action by cabin crew and ground staff means we can no longer continue as a going concern. British Airways has this evening been put into administration.”

This may seem a far-fetched scenario, but not according to Walsh’s own doom-laden forecasts.

That bit in BOLD is my edit

[511Flyer]

My wife and I have flown home today with BA. Alicante-Gatwick. We heard nothing about this, but the cabin crew did look pretty glum. Mind you, they usually do.

D.

[markw]

Rumours of BA's demise are premature, their shares are still trading although they are going down like, well a 747 after a four engine flameout, not nosediving but an unpleasant rate of descent. BA have acidly replied to Richard Branson's jibes in the press about BA going under and unbelievably announced yesterday they were still pressing ahead with the proposed LCY-JFK Minibus executive flyer, which is jaw dropping considering a large part of the £401m loss is down to the drying up of high flying first class accounts from the financial sector, Precisely the market the Minibus operation was aimed at. I would have thought Oor Wullie would have been giving that idea the long finger rather than trying to get the staff to work for luncheon vouchers.

So, BA in Administration? No. In trouble? Possibly. I expect the next six months will be interesting.