British Airways has cut senior management pay by 10 per cent
in a drastic measure to shore up losses sustained following the New York
terrorist attacks.
The move, which will affect some 600 people, is expected to
save the airline £2m between now and the pay review at the end of the financial
year.
The leadership team, including chief executive Rod Eddington
and 12 executive directors, have taken a 15 per cent pay cut.
The pay cuts come as BA announced plans to slash services
worldwide as a result of the fall in passengers since 11 September. Last week
BA announced 7,000 job losses.
"Taking a pay cut is the right thing for the most
senior people in the business to do at this time," said Eddington.
"It’s part of their contribution as leaders in helping BA through this
most difficult of situations."
Incomes Data Services said cutting management pay was
"rare". "It’s unusual for that to happen but BA is in the
extremely unusual circumstance of facing a huge black hole of business
loss," said editor of IDS Reports Alistair Hatchett.
Steve Tatton, editor of IDS Management Pay Review, said that
management pay "very rarely goes down" and the scale was
unprecedented.
"Whether others will follow suit – it is too early to say,"
he said.
