Airline boss bags 30% pay hike

AIRLINE boss Austin Reid enjoyed a pay rise of almost 30% last year - even though his bmi British Midland carrier plunged into the red and laid off hundreds of staff after 11 September.

According to its latest annual report, the highest-paid director - believed to be chief executive Reid - earned £544,000 in 2001, from £421,000 the previous year. It is understood that his earnings were boosted by a one-off bonus from the sale of bmi's ground-handling operation to transport group Go-Ahead. The pay deal contrasts sharply with pay cuts taken by senior executives at British Airways.

The news will anger unions that are holding a ballot on strike action after bmi scrapped flight service managers, the most senior rank of cabin crew.

The UK's second-biggest scheduled airline blamed the terrorist attacks in America for a £12m operating loss and warned that it expected a similar deficit this year. It responded by axing 600 jobs, slashing fares and launching a low-cost airline bmibaby to counter the threat from no-frills rivals such as easyJet, Ryanair and Go.

Total losses, including one-off redundancy charges and the cost of launching new transatlantic services from Manchester, came to £29m. These were offset by the £60m sale of the ground-handling operation.

Airline chairman Sir Michael Bishop owns 60% of the airline, but for the second successive year he and other shareholders received no dividend. SAS Scandinavian Airlines and German carrier Lufthansa each own 20%.

Last year, BA chief executive Rod Eddington and 11 other members of his 'leadership team' took pay cuts of 15% while non-executives, led by chairman Lord Marshall, agreed to a 50% reduction. The move saved BA £26m, though the full pay was restored in March.