HORRIFIC pay cuts of up to £8,000 a year being imposed on thousands of Heathrow airport workers are the cost of eye-watering levels of debt and excessive payments to directors and shareholders, the Unite union claimed yesterday.
Research by Unite, released to coincide with the beginning of an industrial action ballot by members employed at Heathrow Airport Ltd (HAL), lays out a catalogue of financial mismanagement and greed at the UK’s leading airport demonstrating that it is this and not the pandemic, as the airport claims, which has brought it to its present unstable financial position.
Unite says that 4,000 workers, many of whom are being asked to lose a quarter of their salary and are facing destitution as a result, are the UK’s latest victims of ‘bandit capitalism’ whereby the costs of bad boardroom decisions and reckless financial practices are dropped onto innocent workers.
The union has uncovered a vastly complicated corporate structure at the airport involving 13 different companies and subsidiaries. The total long-term debt across the group stands at an incredible £16.676 billion, nearly double the debt of any of Heathrow’s comparator airports.
However HAL, which employs the workers, has assets valued at £15.8 billion. In 2019 the group had reserves of just £822 million.
In the last five years Heathrow’s debt has increased by nearly £3 billion, while since 2012, HAL has paid out £4 billion in dividends to shareholders. This includes £100 million paid this year, after the company’s operations had taken a huge hit from the coronavirus pandemic.
Senior management and the board are not being asked to contribute to the savings programme, only staff.
As HAL’s dividends are not linked to profits but are instead linked to its ‘regulated assets bases’, the more it builds and expands the bigger are its pay outs to shareholders in dividends.
But, as Unite points out, it is not just the shareholders who have fared very well from Heathrow airport. CEO John Holland Kaye pocketed pay and pensions worth nearly £2.6 million in 2019, a remuneration package that is nearly three times that of equivalent airport bosses.
Further, a total 49 directors received over £21,129 million in pay and benefits from the Heathrow group of companies in 2019.
Heathrow workers being asked to make massive salary sacrifices in order to keep their jobs include airside operatives, engineers, firefighters and security officers. Rejecting the cuts, workers opted overwhelmingly to take a vote on strike action this autumn, with ballot papers being issued yesterday (8th October).
The ballot closes on Thursday 5th November.
Heathrow has received over £26 million from the government to furlough workers as part of the Job Retention Scheme. It has also confirmed that it will take advantage of the government’s new Job Support Scheme but despite this additional financial support it is not prepared to revisit the proposed pay cuts.