IATA issues rare bit of good news for the sector

The airline industry’s leading trade body, the International Air Transport Association (IATA), has said carriers are recovering from the recession quicker than expected.

IATA director general Giovanni Bisignani gave the upbeat assessment yesterday, halving this year’s forecast of expected losses in the sector to $2.8 billion (£1.8 billion).

Though still worryingly high, the predicted shortfall marks a dramatic improvement on the $9.4 billion estimated to have been lost by the airline industry throughout 2009.

Mr Bisignani said measures geared at boosting efficiency which were taken by global airlines in the wake of the financial crisis had succeeded in dampening losses.

But he credited Asian carriers with driving the lion’s share of the recovery, while warning that European and US airlines continue to lag behind and must step up efforts to reform.

“We are seeing a definite two-speed industry,” the IATA chief explained. “We are moving in the right direction. The recovery is strong. But we are still far from pre-crisis levels.”

Asian Pacific airlines are expected to make profits of $900 million this year, he predicted, while European airlines will lose $2.2 billion and their North American counterparts will sink $1.8 billion into the red in 2010. Mr Bisignani added that passenger traffic will grow at half the pace of cargo.

The IATA has described 2009 as the worst year for the airline industry since World War II, with the once-lucrative premium sector being worst hit by falling consumer spending power.

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BA strike dates have been called for seven days in March (20-22, 27-30), ending weeks of uncertainty for passengers who have booked flights with the UK flag carrier.

But while the timing of the BA strike is now clear, the impact of the industrial action on specific routes remains unknown and BA customers are still waiting for news of cancellations.

As hopes of a resolution between British Airways and the Unite union now appear to be dead in the water, Cheapflights has drawn up the following BA strike advice for passengers.

 
Which flights will the BA strike affect?

BA will be working round the clock to finalise details of its reduced route network. While widespread cancellations are guaranteed, the airline appears to be confident that its contingency plans (see below) will enable it to operate a larger number of flights. Long-haul services in particular will be safeguarded, as it is these routes which would cost British Airways the most money if they were cancelled.

The airline is forecasting that 100 per cent of long-haul flights from London Gatwick Airport will be running as normal, as will 50% of short-haul flights out of the base. All services at London City Airport will also be fully operational, but the situation at London Heathrow Airport – BA’s main hub – remains unclear. The airline has so far only said that “substantial” numbers of flights will be running.

All franchise, codeshare and alliance flights at all gateways will operate normally.

 
I’m due to fly during the BA strike period. What are my options?

Passengers who are due to fly with BA between 19 – 31 March have the option of re-booking onto an alternative flight on the same route for travel any time in the 12 months.

Contrary to previous reports, passengers can also cancel their booking and request a refund immediately – but anyone wishing to do this must act quickly, as BA’s official guidance states: “This option will only be available until we have finalised our flying schedule.” Once the amended route network is published, customers will only be offered a refund if their flight is confirmed as cancelled. Act now if you want a refund.

Passengers due to fly long-haul out of Gatwick or London City will still be subject to standard rules for re-booking, as it is not expected that those flights will be disrupted by the walkouts.

 
Will my travel insurance protect me from the BA strike?

It depends when you booked your flight. Policies taken out before strike dates were announced should protect you, though the Association of British Insurers has warned that some providers may refuse claims for policies purchased as early as 22 February (when Unite initially declared that walkouts are imminent). You should check the terms and conditions of your agreement and contact your provider.

In the vast majority of cases, even successful claims relating to industrial action will be highly restricted. Your insurer will only pay out if you are delayed for more than 12 hours, and few providers will stump up if you voluntarily take the decision to cancel your trip, when you could have simply postponed it. Package holiday travellers may be better advised to pursue compensation through the ATOL scheme.

 
How is it possible for BA to run flights during the strike period?

BA has known about the strike threat for months and several measures are in the pipeline to keep services running. Central to the contingency planning is the airline’s volunteer programme, which has seen 6,000 staff members from across the company put their name forward to help keep flights operational during the strike. This number includes at least 1,000 fully-trained and certified stand-in cabin crew.

The airline is also banking on large numbers of flight attendants breaking ranks with their trade union and crossing the picket line. Around 4,000 BA cabin crew abstained from voting in the latest strike ballot, and other employees may be scared off striking by the threat of losing their staff travel perks.

Additionally, BA management have leased out 23 fully-staffed aircraft from other carriers, as well as striking deals with partner carriers to transfer passengers to alternative flights.

 
What are the chances that the BA strike will be called off?

The airline’s dispute with cabin crew has had so many twists and turns that Cheapflights is wary of speculating on whether or not an amicable resolution over the BA strike remains possible.

Here’s what we do know: both sides have had months to reach an agreement, and have consistently failed to do so; Unite’s cabin crew members have repeatedly voiced support for pressing ahead with strike action; and BA management have displayed no appetite whatsoever for giving ground. Though back-door negotiations could ultimately bear fruit, air passengers are strongly advised to prepare for the worst.

 
Could the BA strike threat return after Easter?

Sadly yes, this is highly likely. Unite has ruled out staging industrial action specifically over the Easter period, but all other dates remain up in the air. When the union announced the March BA strike dates on Friday, chief spokesman Len McCluskey explicitly warned that walkouts will resume after Easter if the flag carrier fails to accede to cabin crews’ demands. BA boss Willie Walsh is not expected to back down.

© Cheapflights Ltd (Creative Commons image: BriYYZ / Flickr)

 
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