Heathrow airport's Gate Gourmet could go into administration 'this week'

22.08.05

Gate Gourmet could appoint administrators to its Heathrow based UK business this week if it does not reach a deal with BA. 'A source close to the firm' told Reuters news agency late yesterday that it will go into administration on Wednesday, if a deal is not reached with BA by Tuesday night. Such a move that would threaten more disruption for BA at the airport.

Reuters quotes a Gate Gourmet 'source' saying that the company has set a Tuesday night deadline for it to reach an agreement with BA over extending its contract and setting higher prices. 'Unless we can agree, we'll go into administration on Wednesday,' the source added.

Earlier yesterday Tony Woodley, the Transport & General Workers' Union (T&G) General Secretary, warned BA: 'it would be entirely unacceptable for BA to renew its business relationship with Gate Gourmet after what it has done. BA must have a sense of shame, it can't deal with a company that sacked 680 low-paid workers just like that. BA has to realise it is not going to be business as usual with the T&G if it backs Gate Gourmet.'

British Airways has already stated that it will not sign a deal until Gate Gourmet has agreement on more flexible working patterns with the T&G. This appears to be an attempt to force Gate Gourmet to resolve its dispute with the the union. But the new deadline from Gate Gourmet questions this approach.

Gate Gourmet, which is owned by US private equity company Texas Pacific Group, is the sole supplier of in-flight meals to BA. The firm was in talks with the T&G, but talks broke down last week because the union wants all of the sacked workers reinstated, but Gate Gourmet has refused to reinstate the 'ringleaders' - thought to be at least 37 staff, including shop stewards.

Neither Gate Gourmet nor BA were available to comment on the story today. If Gate Gourmet's UK business goes into administration, the company would effectively be run by accountants and could continue to provide a service to BA, the source said.

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