Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 280 - 299)




  280. Gentlemen, I am very grateful to you. I apologise for keeping you waiting but they have a bad Chairman and we are running behind time. Can I ask you firstly to identify yourselves for the record.
  (Mr Lyle) Tim Lyle. I am the National Secretary of the Transport and General Workers' Union's Civil Aviation Trade Group.
  (Mr Sealey) I am Roger Sealey. I am the Researcher in the Transport and General Workers' Union responsible for the transport sector which covers civil aviation.

  281. Gentlemen, do you have any general remarks you would like to make?
  (Mr Lyle) Just by way of introduction, Chairman, to say that we welcome the opportunity to present evidence to you and to answer the questions that you will pose to us. Like everyone around the world we were deeply shocked by the events that occurred on 11 September and doubly shocked, as it were, because the cabin crew and the flight attendants that were on the American Airlines' planes were actually members of one of our sister unions. We have obviously suffered since 11 September with the shedding of several thousand jobs, which I am sure you are going to ask questions on as we go through. We have tried to do our level best since 11 September to persuade Government to provide assistance to the industry. Some of the documentation that we have provided to you deals with what we think should be done in the short-term. On the long-term maybe you will need to question us on that. There are two apologies I have for the Committee. We did submit some supplementary evidence on aviation security which was drafted in response to a request from the International Transport Federation to try and get a worldwide trade union response to security. In the documentation that we supplied to you, which we drafted rather quickly, it does say that we would expect the military, royalty and their entourage to be the subject of security checks. That is a drafting error. We refer to the entourage of royalty, we are not in any way suggesting that the Royal Family—

  282. I am sure it will be a great disappointment to the Queen.
  (Mr Lyle) The other thing is on boarding it says "Match all passengers to their bags. No bag must be loaded on a place without its owner", it really should be "loaded on a plane without its owner". We do apologise for that.

  283. Not at all. It comforts us when other people make mistakes. Could I ask since you said thousands of your members, do we know exactly how many of your members have lost jobs since 11 September?
  (Mr Lyle) The headline figures that have been published show 7,000 jobs at British Airways, although I have to say it is 7,000 person equivalents. I was going to say manpower equivalents, but I am not allowed to say that. That has been dealt with very, very quickly. It was dealt with with 1,000 contractors actually losing their jobs, agency workers. The other jobs have been dealt with by introducing extended leave, unpaid leave, early retirement and also job share. Prior to 11 September at any one time we did have 400 cabin crew members seeking job sharing. It is a difficult job. It is a job that requires you to try to live with the effects of jetlag and try to live what many would regard as an unnatural life, although it is a glamorous life. At any one time 400 were volunteering for part-time jobs. We have accommodated a lot of the 7,000 like that. In terms of the spin-offs, in aircraft cleaning we have lost something like 150 jobs, in fuelling companies something like 30 jobs.

  284. Each company you are saying?
  (Mr Lyle) This is throughout the companies. I can be a little bit more specific in terms of catering. Lufthansa Skychef 193 jobs, Gate Gourmet 320 jobs, Alpha 65 jobs. Being a little bit more specific in cases of ground handling companies: Aviance, a ground handling company which is based at Gatwick, the old Gatwick Handling Company, 270, ServiceAir, which is a very large ground handling company 414, Ground Star 20. We would then make up the rest of what are 10,900 jobs by going through courier services, Gulf Air, American Airlines themselves, Virgin Atlantic, BMI and JMC. I have tried to highlight to you in some specific terms what has made up nigh on 11,000 jobs for us. I will try not to go on at too great a length because obviously I recognise that there may be a lot of questions, but also jobs that rely upon the aviation industry because, as we know, 180,000 people work in the industry and a further 380,000 rely on it. Our latest figures that we have from LRD show us that in engineering as a consequence of 11 September 6,373, tourism 3,000, travel agents 1,750, airport support services 1,010 and the hotel industry 540.

  285. We would really like to know whether you can isolate how many of those figures that you have quoted, particularly where they are your members, are because of the events of 11 September or how many of them were in effect in the pipeline before that date. Is that a sum you can do?
  (Mr Lyle) I think I could do that. I think in terms of the ground handling companies, the catering companies, the refuelling companies, the support service companies, every single job that has been lost there is as a consequence of the airlines reducing their services. Those were jobs that would not have been lost prior to 11 September. I think the important thing that I would respond to, because I gather the thrust of the question, is that certainly in British Airways because of the downturn in the North Atlantic traffic which was as a consequence of foot and mouth and the downturn in the American economy we were facing 1,800 job cuts at British Airways. We were also facing further reductions in recruitment, so it is not just 1,800 jobs going, it is less people being employed. We were also facing entering into negotiations with British Airways about changing the way that we work. It would not be giving away a secret to say that overtime is endemic, on the ramp in the industry, and British Airways were in the process of starting a dialogue with us about cutting out levels of overtime. 11 September, of course, made those reductions even worse. Very shortly after 11 September we were then faced with a further 5,200 jobs which made it 7,000. British Airways have argued, and it is very difficult for us to combat that argument, that the 5,200 jobs have come as a direct result of 11 September. We were meeting with British Airways and seeing figures such as 33 per cent reductions in business across the North Atlantic and the North Atlantic, of course, is what produces the profit for British Airways, it goes in the profit bucket from the North Atlantic and unfortunately falls out the bottom from the rest of the world. Those sort of figures place British Airways in a position where they will say to us that the cashflow was such that they were losing £125 million per month. Whilst one should not base one's arguments and responses to a company merely on anecdotal evidence I did spend quite a lot of time at the airport, receiving and getting the picture of the load factors and it is true that there were planes flying across the North Atlantic with less than 100 people on them. Personally I flew to Washington on a 777 and there were 98 people on board, even worse only four in first class and only 15 in what we would call club class, so the profit side of the cabin was virtually empty. The whole of the plane was empty but it was more exacerbated by the fact that the front was emptier. Quite frankly we were prepared as unions to go along the negotiating trail with British Airways prior to 11 September and post 11 September when we were beginning to see the sort of figures that were coming.

  286. Can I ask if you have any idea how many jobs have been lost with British Airways since it was privatised in 1987,considering it has taken over a number of other airlines?
  (Mr Lyle) I cannot give you a figure. I do know that last year something like 3,000 jobs went out of British Airways

  287. Perhaps you can do me a little note on that.
  (Mr Lyle) One of the difficulties that we have with British Airways is that with job losses, whilst we as unions are very, very opposed to them, British Airways do not have a difficulty getting rid of people because their redundancy package is such that they throw money at them.

  288. The questions we ask are not to be taken as pejorative, we are after information. If we did not want information we would not ask. What I need from you are figures. What about the priorities for the United Kingdom government, what are they to do in order to help the aviation industry and the challenges at the moment?
  (Mr Lyle) Some of the things—you are going to tell me off for not answering your question—you have done we are rather pleased about. We are pleased that the government has announced Terminal 5. We are pleased that there is £40 million for the four days that the airspace was closed off. I think what we would say is that the further assistance that the industry needs is it needs a level playing field, as it were, with the American carriers. We know the money that has been given to the American carriers. Mr Sealey can update us a little bit more, they were not only compensated for the four days they lost their space, but they have been compensated for on going losses. The other thing that the government certainly could do in order to assist us in cashflow is it could suspend the collection of airport passenger duty. Airport passenger duty is worth roughly one billion to the industry. It is important not that it is scraped completely, I accept that would probably be non-sensical, but avoiding collection for some time would be of assistance in cash flow. I believe the other thing the government could do is it could underwrite the cost of the increased security burden that is falling upon both the airlines and the airports.

  289. Have you figures for how much we are talking about, Mr Lyle?
  (Mr Lyle) Mr Sealey can help us on that one.
  (Mr Sealey) I can give you an illustration which might be helpful.

  290. I want real figures?
  (Mr Sealey) This is from El-Al At the moment El-Al's security costs are about 25—

  291. I am going to stop you there, Mr Sealey, this Committee has gone to London Airport to look at El-Al's operation, it is an extremely clever and well founded operation, it is an expensive operation because it is a good operation. El-Al security have the right to phone anybody in Israel. They have absolutely carte blanche when they want to get information. They are not really comparable with British airlines. I can tell you having travelled on both airlines over many period of years the El-Al's situation is different.
  (Mr Sealey) The point I was going to make was what they pay themselves, let alone what they receive in state aid, is in effect two per cent of their revenue

  292. That is helpful, although I think it is also slightly unlikely in the situation we are talking about.
  (Mr Lyle) I have found it rather difficult to get a handle on the figure. I was with BAA only yesterday and put it to them that I was coming to you today and I asked them what the figure would be and unfortunately I did not even get it from the British Airports Authority. I do not think in the evidence they submitted to you they have put a figure. The nearest we got to a figure was evidence that was submitted or questioned last week, when I believe one of the respondents quoted a figure of £4 million for the London airports

  Chairman: Keep digging, Mr Lyle, and come back to us when you have something.

Mr Stevenson

  293. You have mentioned the government's action, which has been very, very helpful, what about the industry itself? You have indicated where government could take further action, what about the industry itself? Do you think the industry is responding in an appropriate fashion?
  (Mr Lyle) In terms of the way they are dealing with us?

  294. In terms of the problems affecting the industry and your members?
  (Mr Lyle) I think in truth the major carrier that we have our membership in, which is the 23,000 members we have at British Airways, I believe they were responding prior to 11 September. I believe they were responding in a way that meant they were going to get an agreement with us. One of the basic things that has been agreed with British Airways right the way throughout this is that there will be no enforced redundancies and, in fact, there have been no enforced redundancies since we started. I know that people in Belfast have lost their jobs but there is a redeployment agreement. The 40 people that lost their jobs could have transferred to the United Kingdom, one may say that is not much of an offer, but at the same time several people did transfer. In the way we have been dealt with by the industry certainly those large carriers that have good industrial relations and deal with us in a sensible way have dealt with us well. One of the things about the aviation industry is it is highly unionised. We as a Union have something like 50,000 members in that industry. Most of the companies we are dealing with have, to a large extent, negotiated agreements round things like short-term working, job sharing, early retirement. I am not, at this stage, being critical because I would not have been critical, I would have done something about it.

  295. How concerned are you that the recession and the events of 11 September, the recession in the United States in particular, will have further down the supply chain?
  (Mr Lyle) From the sort of figures that I have given to you I am deeply concerned about that. Not to belittle the issue, this is about the textile workers in Bradford who have lost their jobs because British Airways are not ordering so many uniforms. The spin-off from 11 September down the line is very, very serious. That is why we as a Union thrust our argument in providing some short-term aid to the industry, because we certainly are confident in the long-term that the industry will grow again. We only had to look at the papers yesterday to see that easyJet are purchasing 35 airbuses. Ryan Air is increasing its passenger loads. Go passengers are up I think 57 per cent. It will come back. One of the reasons why we as unions have argued for no redundancies but are dealing with the issue of part-time work, short-term work and extended leave is that there is a confidence that the business will come back.

  296. Nevertheless, in spite of Ryan Air, Go and easyJet and the others, there has been a drive towards consolidation over years in particular, do you see that consolidation process continuing? If so, what assessment of the implication have you made?
  (Mr Lyle) I can only answer the question with some sort of gut feelings about it because I do not run an airline. My own view is, yes, there will be consolidation. My own view is there will not be the number of European carriers when we come out of this that there are now. I do have a confidence to believe that one of those that will survive and gain from it the fact that it will survive will be British Airways. If you ask me for another survivor I would say Lufthansa, if you ask me for another survivor I would say Air France.


  297. Not for the same reasons, Mr Lyle, but we will not go into that.
  (Mr Lyle) Certainly some of the European carriers will go down. We have seen SABENA and we have seen Swiss Air. It was mentioned earlier on, we have seen Gill, these, I think, are the first of many.

Miss McIntosh

  298. In your supplementary evidence you refer to all bags being loaded on the plane with the owner. Do you have any specific evidence that any bag travels without its passenger, because that is an infringement of existing international law?
  (Mr Lyle) One of the things that the airports tell me is that they never lose a bag, what happens is they misplace them. There is plenty of evidence that people arrive on holiday or on business and their bag is not on the carrousel


  299. Surely not, Mr Lyle!
  (Mr Lyle) By definition if the bag is then going to get to them it travels without the passenger.

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