British Airways staff ended strike after company offered improved deal
Consolidated international airlines (GB:IAG) unit, British Airways, and its employees have mutually agreed to a deal that removes the dangling sword of strikes from the airline’s head. The workers accepted the wage hike and other benefits, which include a combined 13% wage increase this year.
The deal averted the planned strike at Heathrow Airport. The move came as a relief to passengers who are currently facing chaos at Heathrow Airport.
Recently, due to a lack of staff and an increase in cancellations, Heathrow Airport advised airlines, including BA, to reduce their summer flights.
No wonder airline industry stocks are hitting the ground. Stocks have not rebounded since the pandemic hit the airline industry hard. IAG stock is down 27% since the start of this year. Among BA’s competitors, Wizz is down nearly 60% and EasyJet is down 37% since the start of the year.
The new deal
In a summer full of fight cancellations and airport chaos, BA really wanted to restore the confidence of its customers. After several rounds of talks, the airline and the union agreed on this much improved offer. The new contract includes an 8% salary increase and a temporary bonus. Workers will also receive additional pay for irregular shifts. The new offer was very well supported by nearly 75% of workers. The deal was led by the Unite and GMB unions on behalf of the workers.
Before this agreement, workers were unhappy because their 10% pay cut during the pandemic had not been reinstated.
GMB National Officer Nadine Houghton said: “Nobody wanted a summer strike at Heathrow, but our members had to fight for what was right.”
Sharon Graham, General Secretary of Unite, said: “We are pleased that BA has finally listened to the voice of its check-in staff. Unite has repeatedly warned that pay disputes at BA are inevitable unless the company takes our members’ legitimate grievances seriously.
BA canceled around 30,000 flights in the April-October period this year. With this deal, the analyst and shareholders hope the airline will be in a better position to meet growing demand.
According to TipRanks analyst rating consensus, International Consolidated Airlines‘ the stock is a moderate buy. This is based on ratings from 11 analysts, of which five are buy ratings and six are hold ratings.
The average price target is 152p, implying an upside potential of 31.5%. The analyst’s price target has a high and low forecast of 200p and 106.4p, respectively.
BA continues to face headwinds, with thousands of flight cancellations.
Issues such as rising jet fuel prices, staff shortages and the cost of living crisis will continue for some time and impact the recovery of the business.
However, passenger demand is returning to pre-pandemic levels, which will boost BA’s revenue. The airline has taken a step in the right direction to get its operations back on track.