Gate Gourmet, the U.S. catering company that prompted an unofficial strike at British Airways PLC earlier this month when it fired hundreds of its staff, said Monday its British operations could file for bankruptcy.
Gate Gourmet has set a Tuesday evening deadline to reach a new commercial deal with BA, its biggest British client, or face the prospect of going out of business.
The company, owned by Texas Pacific Group of Fort Worth, Texas, fired about 660 workers almost two weeks ago after they staged an unofficial strike over working conditions. About 1,000 BA ground staff walked out to support their fellow union members, leading to hundreds of canceled flights and more than 100,000 stranded passengers.
Talks to resolve the dispute between Gate Gourmet and the Transport and General Workers Union broke down last week because the caterer refused to reinstate staff it dismissed.
“At the moment, Gate Gourmet is not a viable commercial organization and so (bankruptcy) administration has to be a real probability,” Gate Gourmet Director Andy Cook told BBC TV’s “Breakfast” program.
“As disappointing as it is, you know, we’re faced with losing 25 million pounds ($45 million) a year. We’re faced with having no contract with British Airways that gives us commercial terms that we need and so we’ll end up in a situation of having absolutely no choice,” he added.
Union leaders have put pressure on BA to help resolve the situation and have the workers reinstated, warning that a failure to do so could lead to further disruptions at the airline.
BA is in separate talks with Gate Gourmet about improving the service it is providing.
The airline began serving hot foot made by the caterer on its long-haul flights departing from London’s Heathrow Airport on Monday for the first time in 12 days. It plans to start serving hot meals on flights arriving in London on Wednesday. Passengers on short-haul flights continue to receive food vouchers for use at the airport.
London’s High Court ruled Sunday that pickets outside Gate Gourmet’s Heathrow plant by former staff could continue, but made the union legally responsible for any action. The court also put a limit on the number of pickets outside the company’s doors.