A stunning example of how wage costs can differ for the same job

A very interesting and potentially explosive article in The Times today highlights the problems faced by British Airways as it seeks to reduce its operating costs…

British Airways is locked in negotiations with its trade unions about how to cut its staff costs. The Times article may not help the negotiation!

BA recently announced substantial losses for 2008 and the CEO Willie Walsh takled of a battle for survival; a few days later Virgin Atlantic announced that it had made a small profit during 2008. Perhaps the article helps to explain why:

“Data from the Civil Aviation Authority (CAA) shows for the first time how much higher BA’s wage costs are than its rivals. The average salary for BA’s 14,000 cabin crew, including bonuses and allowances, is £29,900, compared with £14,400 at Virgin Atlantic and £20,200 at easyJet. BA’s pilots earn an average of £107,600, compared with £89,500 at Virgin and £71,400 at easyJet.”

You might argue that Virgin’s wages are too low (the unions will almost certainly take this approach). But to be paying around twice the rate of the major competitor suggests that employment costs are the place to look as BA stuggles to survive.