BA ‘optimistic’ about Gate Gourmet deal

British Airways have said they are “optimistic” of reaching a new deal with its troubled catering supplier Gate Gourmet.

On Monday, the US-owned catering firm warned that its UK operation faced collapse unless a new deal could be secured with BA by 17:00BST.

Last month, BA had offered a deal, including improved terms and a two-year contract extension until 2010. However, the airline said that the deal would not go ahead, unless Gate Gourmet made changes to its working practices.

BA has not confirmed the details of the terms that have been offered to the caterer, but a spokesperson said: “We are more optimistic about finding a solution.”

Gate Gourmet is the sole caterer for British Airways flights out of Heathrow airport. It employs 1,400 employees at Heathrow and 1,100 elsewhere in the UK.

The catering firm is facing a financial crisis. It lost around £22 million last year and, according to reports, stands to lose around £25 million this year. The British Airways contract is vital to the survival of the company. It failed to renew a contract with Virgin Atlantic in March.

Similiarly, BA is dependent on Gate Gourmet – no other catering firm is large enough to meet the airline’s demands at Heathrow.

Talks are also continuing between the Transport and General Workers’ Union and Gate Gourmet over the sacking of 670 workers, over alleged unofficial strike action. The union wants the workers to be reinstated, while the firm insists that around 200 workers will not be re-employed.

The sacking of the 670 workers, many of whom were Asian women, prompted around 1,000 BA employees to walk out on strike in sympathy two weeks ago. The disruption resulted in the cancellation of 700 BA flights and left thousands of passengers stranded.

BA has said it would expect Gate Gourmet to continue to supply in-flight meals, even if it went into administration. However, the airline has ruled out the possibility of buying the catering firm, even if it does go into administration – the TGWU urged BA to purchase the company on Monday.

BA began to serve hot meals on its long-haul flights again on Monday for the first time since the dispute began. However, short-haul passengers are still being provided with bags of cold food prior to boarding their flights. The airline is planning to resume the service of hot meals on all their flights again from Wednesday.

(KMcA/GB)