Looming strike overshadows BA merger

British Airways Plc Chief Executive
Officer Willie Walsh may face a sixth round of walkouts by 11,000 cabin crew
that threatens to cast a shadow over a merger with Spain’s Iberia Lineas
Aereas de Espana SA.

The Unite union plans to announce
the result of a month- long strike poll of flight attendants 21 January, the
same day British Airways ends almost 25 years as a mainstay of the U.K. stock
market before combining with Iberia next week.

“It seems clear to us that there
will be a positive return and a call for industrial action,” Brendan Gold,
Unite’s national secretary for civil aviation, said.

British Airways rented planes and
trained staff from other parts of the company to act as emergency crew when
flight attendants walked out for a total of 22 days in five strikes last year
in a dispute over pay and staffing levels.

Still, the action cost about $240
million, and a repeat would pose a “serious headache,” said Douglas McNeill, an
analyst at Charles Stanley.

“BA by now has a fairly
well-rehearsed contingency plan, which seems to be relatively effective, and it
should be a short-term problem, but remains a distraction,” said London- based
McNeill, who has a “reduce” rating on British Airways stock.

The merger, which values the
combined carriers at $10 billion at market value, will help British Airways
narrow the gap to Air France-KLM Group and Deutsche Lufthansa AG, Europe’s
biggest airlines, while consolidating its No. 1 status in trans-Atlantic
markets.

Walsh, who becomes CEO of the new
company, also won antitrust immunity last year for a closer pact with AMR
Corp.’s American Airlines after years of applications.

Unite’s Gold said that the timing
and scope of a walkout will probably be announced at a later date.

The dispute originally concerned
pay and staffing levels but now centres on the suspension of strikers and the
full restoration of travel perks.

No new negotiations are planned,
ACAS spokesman Matt Barker said.

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