BA Strike Reveals Modernisation Risks

A wildcat strike by British Airways ground workers which caused chaos for the airline underscores risks it faces as it pushes a modernisation drive which threatens jobs.

The walkout on Thursday and Friday by about 1,000 unionised workers at BA, Europe's third-largest airline, was called in sympathy over job cuts at an outside catering supplier.

But analysts say it demonstrated how willing BA's own unionised workers are to act against the airline, where 13,000 jobs have been cut since 2001 and more could be threatened as it modernises further.

The "real issue is that it shows (BA's) labour situation remains touchy," said UBS analyst Robert Ashcroft in a research report.

Looming over BA and its relations with the Transport and General Workers Union (TGWU) is the airline's planned move to a new terminal at London Heathrow in March, 2008.

Long before then, workers will need to undergo retraining on new skills and BA is expected to ask TGWU members to forfeit limits on what new tasks they may be asked to perform.

"They are showing their muscles," said Exane BNP Paribas analyst Nick van den Brul regarding last week's walkout, which stranded 100,000 passengers and cost BA an estimated GBP

(Reuters)