Gate Gourmet avoids administration with new deal

24 August 2005
Gate Gourmet avoids administration with new deal

Gate Gourmet, the airline caterer at the heart of the British Airways dispute, has said that thanks to a deal to modify its £130m catering contract, it won't have to put its UK operation into administration.

The announcement is a step towards safeguarding the jobs of the 1,400 workers the caterer employs at its kitchens at London's Heathrow airport.

Chairman of Gate Gourmet David Siegel said: "We thank BA for adjusting the contract and recognising the need to provide us some relief given the new realities of the industry."

Gate Gourmet said progress continued to be made over the 670 dismissed employees that went on unofficial strike after 130 casual workers were bought in to cover the peak travel season.

As part of the restructuring deal the company has said redundancies are likely as well as "improved labour practices".

Regardless, the company remains in serious financial trouble. It has been on the verge of bankruptcy since missing debt repayments in December and the ending of a three-month freeze on bankruptcy filing on 11 April.

Gate Gourmet has not made a profit since 2000 and is expected to make a £25m loss this year. Over the past four months, the company has been trying to negotiate new working practices, plus wage cuts and a loss of benefits, in an attempt to reduce its labour costs.

American union Unite Here, which represents 6,000 Gate Gourmet employees, has demanded the reinstatement of the sacked workers and threatened industrial action of its own if not.

Buy this week's Caterer magazine for more industry news and analysis

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking