UPDATE 2-BA crew begin fresh strike, no peace talks planned

* Cabin crew begin five-day strike over staffing changes

* BA say no more talks on the horizon

* BA says to fly reduced service from Heathrow

* BA shares down 0.4 percent

(Adds BA, analyst comment, detail, shares)

By Rhys Jones and Estelle Shirbon

LONDON, May 24 (BestGrowthStock) – British Airways Plc (BAY.L: ) cabin
crew began a five-day strike on Monday after talks broke down in
a dispute over wages, jobs and working conditions and BA said no
further negotiations were imminent.

The airline said it planned to operate more than 60 percent
of long-haul flights and more than 50 percent of short-haul from
London’s main Heathrow Airport, allowing 70 percent of
passengers to reach their destinations.

Flights from London’s Gatwick and City airports were not
affected by the strike. Two more five-day strikes are planned if
the dispute cannot be resolved following stoppages in March.

“There are no more talks on the horizon,” a BA spokesman
said. “Our operations are going very well so far today.”

BA said it would lease up to eight aircraft with pilots and
cabin crews from other airlines to keep passengers on the move.

BA Chief Executive Willie Walsh and leaders of the labour
union Unite, which represents the cabin crew, blame each other
for a breakdown in communication.

“I made an offer to Willie Walsh yesterday to put back our
people’s travel concessions that he’s vindictively and foolishly
taken away from them and I would personally call this strike
off,” Unite co-leader Tony Woodley told BBC Radio.

The issue of travel allowances for cabin crew has become a
major sticking point in the conflict, which comes at a difficult
time for BA. The airline last week announced a record full-year
loss of 531 million pounds ($763.9 million). [ID:nLDE64K07O]

UNDERLYING BUSINESS

BA shares had risen a quarter in the last year as an
industry-wide recession eased, but some 10 percent of those
gains disappeared last week after a court said staff could press
ahead with further strike action.

The stock was 0.4 percent down at 187.5 pence by 12.40 GMT,
valuing the business at around 2.2 billion pounds.

Analyst Stephen Furlong at Davy Stockbrokers believes the
market is more interested in the state of BA’s underlying
business than the strikes and said trading conditions were
improving.

BA on Friday predicted a return to breakeven next year and
said its yield — the revenue it makes on each passenger for
every mile travelled — rose 3.2 percent between January and
April and would likely keep growing in 2010. [ID:nLDE64K07O]

Some analysts, however, believe the strikes could put off
previously loyal BA customers from flying with it in future.

“Strike action at BA will not in my view succeed except that
it risks alienating BA from more of its customers long term,
meaning it could seriously weaken the airline,” BGC Partners
senior strategist Howard Wheeldon said.

Cabin crew strikes in March cost the airline 43 million
pounds, a figure included in the loss posted last week. BA has
suffered an additional 100 million pound hit due to disruption
to flights caused by ash from an Icelandic volcano.
[ID:nLDE64512M]

The government urged the two parties to resume talks to
settle the dispute.

The latest round of face-to-face talks between managers and
union leaders on Saturday came to an ill-tempered halt after
protesters from a tiny left-wing group invaded the venue.
[ID:nLDE64L0AT]

Stock Analysis

(Additional reporting by Keith Weir; Editing by David Stamp and
David Holmes)
($1=.6951 Pound)

UPDATE 2-BA crew begin fresh strike, no peace talks planned