By Kevin Done (23 Jan 08)

Last week's crash landing by a British Airways jet at Heathrow airport brought only a temporary respite in the worsening relations between the airline and its pilots.

Once the heroism of the BA flight crew had been lauded, the two sides returned rapidly to the process of digging themselves ever deeper into a potentially highly damaging dispute over the setting up of BA's new airline subsidiary OpenSkies.

Unless there is a sudden climbdown by BA, Balpa, the British pilots union which represents the airline's 3,200 pilots, will formally deliver the legal notice of its strike ballot on Wednesday.

At the heart of the disagreement is the insistence by the pilots that there should be one pilot body, which would allow flight crews to move seamlessly between the BA mainline operations and OpenSkies. Most crucially they would be on the same BA pilots seniority list.

BA is equally adamant that OpenSkies should have a separate pilot workforce, which has been separately recruited rather than drawn from the existing BA master seniority list.

The seniority list may appear to be an arcane labour relations practice but it is at the heart of pilots' lives at many airlines, in particular the legacy network carriers such as BA, and it is jealously guarded by the pilots.

The place in the pecking order determines which routes and aircraft a pilot flies, and therefore his or her pay.

Furthermore, it helps determine roster patterns and often whether or not he or she is at home or away at weekends. Pilots bid for work based on seniority.

You rise up the list either by people above you retiring or new pilots joining below you. Management has no say in the process. Pilot seniority lists are one of the key issues that also bedevil airline takeovers.

Willie Walsh, BA chief executive and a former pilot at Ireland's Aer Lingus, is determined that OpenSkies should be a new airline within the BA group and as unencumbered as possible by restrictive, legacy labour practices.

He is seizing the opportunity to experiment, presented by the unexpected signing last spring of the "open skies" treaty between the US and the European Union, designed to liberalise transatlantic aviation. Any EU or US carrier will for the first time be able to fly between any point in the EU and any point in the US.

BA's OpenSkies subsidiary is supposed to start flying in June between the US and leading business and financial centres in continental Europe. The services will not touch the UK. The two first routes will be between New York and Paris and Brussels.

BA insists there will be no change in the terms and conditions for existing BA pilots as a result of its starting OpenSkies.

It says it has offered the chance for pilots to be seconded to work for OpenSkies with their pensions and seniority protected. It has asked Balpa to represent the OpenSkies pilots.

However, BA said: "This is a start-up airline in a new market. We need the ability to respond quickly to change and to be flexible. We think that with a common seniority list that flexibility would be inhibited."

Just the strike threat can be expensive, even if an actual strike is still at least five weeks away.

The threatened cabin crew strike in January last year cost BA 80m GBP ($157m) in lost revenues as thousands of passengers booked away to other airlines.

The strike threat also comes just as BA is on the final run-in to the opening of Terminal 5 at Heathrow, which is supposed to usher in a new era of passenger comfort and convenience. And it could threaten the airline's ability, for the first time in its history, to reach a 10 per cent operating profit margin.

The two sides are playing for very high stakes.