How long can British Airways survive?
As the bitter dispute between the British Airways management and the Unite union continues unabated it appears that the two parties are nowhere near an agreement on the travel perks which are at the center of the disagreement. The strike is costing British Airways millions of pounds a day and with suggestions that the Union may well look to ballot members on further strike action it would seem this situation could get very much worse.
This dispute has been ongoing now for more than a year and has caused major disruption to British Airways services and placed massive pressure on the company's balance sheet. In the year ended 31 March 2010 the company announced a pretax loss of £531 million which is an unbelievable figure. While there's no doubt that in line with other airlines around the world British Airways does need to cut costs and realign itself for the future this is a battle which has potentially serious consequences.
Quietly many analysts are concerned about the long-term future of British Airways as hopes of a short-term solution to the dispute looks further away than ever before. The very fact there has been no takeover speculation swirling around the company is perhaps a telling blow and a perfect reflection of the very difficult situation that Willie Walsh finds himself in.
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