Leading Article: How British Airways can fly out of the storm

In the matter of British Airways vs the Transport & General Workers' Union, who exactly is right? If this dispute were in the pre- privatisation mid-Eighties, when the battle with trade-union power was not quite convincingly won and the liberty of managers to manage still unproven, we can be confident that the overwhelming establishment view would be simply that it was wrong to strike, wrong to disrupt passengers' lives, wrong to believe that unions could tell businesses how they should be run.

Thankfully, the world is more complicated and subtle than that today. Latent in the Thatcher ideology was a presumption that all strikes were wrong. Some on the right sincerely believed that if you enforced ballots for every strike, industrial action would become a thing of the past. It is true: ideally, strikes never would happen. In a paradisal economy, employees would see the damage that a dispute would do to their collective prospects, while managers would see that their long-term interests lay in maintaining committed and motivated staff. But in this world, the real one, sensible and committed employees will vote for strike action, and well-led managements will fight their staff, because for a multitude of reasons they cannot find a solution without testing each other's strength and will.

This dispute is no different. Behind it lies a complex of causes, and it is worth spending a moment disentangling them. Bob Ayling (revered modern man/notorious boss figure, depending on your perspective) needs to broker a sequence of deals which re-invents BA as a company whose core activities are wholly staffed, whose support activities are wholly franchised, and which succeeds thereby in cutting roughly pounds 1bn off its running costs over the next several years.

In this laudable project Mr Ayling has made significant progress. Most of his employees have agreed to one or another new arrangement which either transfers their work to an outside contractor on agreed terms, or reorganises their employment with BA on a new basis. But now he has hit at least one major barrier, in the form of the stewards and stewardesses' branch of the T&G.

History always plays a part in these disputes. In this case, Mr Ayling and his managers have a long-standing desire to see off the air crew branch, because they have found it obstructive in the past. Really, one suspects, Mr Ayling would prefer that the branch played no role in his business. The branch in turn has placed itself in the role of intransigent by walking out of talks in which its breakaway competitor union, Cabin Crew 89, found itself able to reach agreement with BA.

It is easy to see why the cabin crew are annoyed: Mr Ayling thinks they are paid more than they should be, particularly new recruits, and he wants to restructure their pay. He has guaranteed that existing employees will not see their pay cut - but the implication is that they will not see their pay go up for a long while, either.

Although Mr Ayling is right, he must understand that his folk are not going to be overjoyed. Staff PR, however, which BA has historically been good at, has this time been lamentably poor: as it stands, it is not hard to provoke a member of BA's cabin crew into telling you quite politely but in very caustic terms what he or she thinks about Mr Ayling and his managers.

Meanwhile, the ground staff are threatening to join the dispute, in protest at the terms for having their jobs contracted out. In principle Mr Ayling is again right to draw a distinction between staff who deal directly with the public, such as cabin crews and ticket desk staff, and those who stand in front of an aluminium counter in a west London warehouse stuffing bits of stringy chicken and pale vegetables into foil-wrapped lunch packs. The Ayling principle here is that flying is a people business: where staff have direct contact with the customer, they should be BA employees; where they don't, they shouldn't. Makes sense - unless you, as an employee, fall victim to a drastic deterioration in working conditions.

It follows that the passage from this world to the brave one needs to be handled with enormous sensitivity. The fact that both sets of employees have voted overwhelmingly for action, and that many seem intent on pursuing it, ought at least to make BA management pause for reflection. At present, union officials are trying to show that they can provide the cost reductions in an alternative way. BA should hear them out, test their assumptions, and respond constructively. Macho manners have no place in managing this kind of process. On that point alone last night's legal threats from BA seem out of place.

But what is the answer to the question, who is right in this dispute?

The important point is that the customers do not really care. What matters to them is that they wish at the moment that they had not booked BA; either that, or they are in the process of choosing not to book BA. That outcome does not help either side in this dispute. It is not doing BA's share price much good, either.

In such circumstances, the side that is right is the one that has the wit to come up with an accommodation that achieves the central restructuring objectives, over time, but leaves the staff feeling that they have not been trampled upon. Since Mr Ayling has such a reputation for creative management, he should try living up to it. In the end it is not up to the union to find an answer, as he has in effect accepted by rejecting its proposals. It is up to him to get his company out of the hole in a way that enables his employees, and their union, to feel that they have been heard, and understood.