British Airways could be left stuck with strike firm

British Airways (BA) may be forced to continue using Gate Gourmet, the catering company whose staff row sparked chaos at Heathrow last week and may cost the airline as much as £40m, because of a lack of other companies able to take on the job.

The airline has warned that it may ditch the catering group after BA staff went on wildcat strikes in sympathy with 670 workers sacked by Gate Gourmet after a row about pay and conditions.

"The contract is up for renewal in 2006. We will make a decision at a more appropriate time," a spokesman for BA said.

Sir Rod Eddington, the outgoing chief executive of BA, has made no secret of his anger at the situation at Gate Gourmet, which saw hundreds of workers sacked after a long-running dispute with management.

When BA staff walked out in sympathy, hundreds of flights had to be cancelled, leaving more than 100,000 passengers stranded. Sir Rod has it was a "huge disappointment" for BA to have "become embroiled in someone else's dispute".

However, it is understood that severing its £130m contract with Gate Gourmet will be difficult, given the scale of the business involved.

A BA source said: "There are no other single suppliers at Heathrow that could deliver the scale of service we need."

Gate Gourmet is BA's sole supplier of on-board food and refreshment at Heathrow, having bought BA's in-house catering business in 1997. It provides BA with 80,000 meals a day and is the world's second-largest in-flight caterer behind Sky Chef.

The next largest is Alpha Group, which supplies BA's Gatwick flights, but the market then becomes very fragmented. Without the BA contract, Gate Gourmet in the UK would almost certainly be plunged into administration. Its losses are already set to hit £25m this year.

Meanwhile, BA could face further industrial action by its staff as it gears up for more job losses. As much as 15 per cent of its baggage handling staff may have to be cut as part of its move to a new fifth terminal at Heathrow in 2008.

However, BA said it was beginning a long process of negotiation that would mean all the job cuts could be accommodated through voluntary redundancies and redeployment.

- INDEPENDENT