Strikes Cost British Airways $182M

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British Airways issued a profit warning this morning and expects its fiscal year profits to be 6% lower in 2019 compared to 2018.

British Airways

The pilot strike cost the airline €137M and the airport staff one that was canceled at the last minute additional €33M. The bookings at its Vueling and Level airlines are also softer and lower yielding this year.

More strike dates in the horizon per Financial Times (access their piece here):

However, IAG said there had been “no further talks” between BA and the pilots’ union and that its offer of an 11.5 per cent pay increase over three years still stood.

Balpa said BA pilots believed their management was treating them with contempt and were asking the union to consider more strike dates.

And here’s an excerpt from the BBC (access their piece here):

It said the two-day strike earlier this month in a row over pay and conditions had cost it at least €137m (£121m).

As a result of the two-day strike by pilots on 9 and 10 September, IAG said a total of 2,325 flights had been cancelled. A strike by BA pilots that had been scheduled for 27 September was called off last week.

In addition to the costs from the pilots’ strike, IAG took a €33m hit over threatened strikes at Heathrow Airport by employees.

The airline group also said its results would include a €45m hit from lower bookings and yields – a measure of the average fare per passenger mile – at its low-cost Vueling and Level airlines.

Conclusion

The pilot strike was very expensive for the airline and these costs may balloon when/if pilots announce additional dates. Merely the strike probability looming on the horizon makes business travelers who don’t like travel disruptions to book on competing airlines.

Not sure what is going on with Vueling and Level? Perhaps passengers are fed up how especially Vueling treats them in case of irregular operations and simply choose to fly with someone else?

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