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* 48-hour strike is first by BA pilots
* BA chief: pilot strike is an own goal
* But airline has faced numerous setbacks
* Further strike planned for Sept. 27
* Shares recover slighly to trade 1.2% lower
(Adds estimate of costs of strikes, background)
By Paul Sandle and Alistair Smout
LONDON, Sept 9 (Reuters) - Nearly all British Airways (BA)
flights were grounded by its first ever pilots strike on Monday,
disrupting the travel plans of thousands of passengers in a
dispute over pay.
The action by British Airline Pilots Association (BALPA)
members forced BA, part of International Airlines Group (IAG)
, to cancel 1,700 flights to and from London's Heathrow
and Gatwick airports during two days of action in its latest
high-profile setback.
BA faces intense competition on short-haul routes from
easyJet, Ryanair and other low-cost airlines and
has faced a number of operational hiccups in the last few years.
"It's going to punish customers, it's going to punish our
brand, it's going to punish the rest of the colleagues," BA
Chief Executive Alex Cruz told BBC TV as IAG shares dropped by
as much as 3% in early trading.
BA has offered its pilots an 11.5% pay rise over three
years, which it said would take the pay of its highest earning
captains from 167,000 pounds ($205,000), plus 16,000 pounds in
allowances, to just over 200,000 pounds.
BALPA wants the pay deal to include profit sharing for BA
pilots, who on average earn around 90,000 pounds a year.
"British Airways is going through some good times, we want
to share in those profits just as we shared the pain in the bad
times," BALPA General Secretary Brian Strutton told BBC TV,
adding that while pilots were willing to compromise, BA was not.
BALPA added that no further negotiations with the airline
were currently planned.
The union said it would be cheaper for BA to meet its
demands than face down the strikes as the action cost it 40
million pounds a day. Analysts had similar estimates, but BA
declined to comment on the cost incurred.
The airline dismissed a new offer by BALPA last week as an
"eleventh hour inflated proposal" that was not made in good
faith. BALPA had said it would have called off the strikes this
week if BA had engaged with the offer.
BA's Cruz said the 11.5% offer was "way above" inflation,
which stood at 2.1% in July, and already recognised that BA was
making money.
"The commitment of everyone at British Airways is to get
over this particular dispute as quickly as possible and we urge
the union to sit down with us as quickly as we can so we can
reach an agreement," Cruz told BBC radio.
He said it was a BA dispute and it would be resolved by the
carrier rather than IAG.
SETBACK
The strike is the latest setback for BA, which in August
suffered its third major computer failure in little more than
two years, disrupting flights in its peak travel period.
It also faces a record $230 million fine under tough new
data-protection rules after the theft of data from 500,000
customers from its website last year.
And it has been harder hit by industrial action than
Ryanair, which reported no travel disruption after its
British-based pilots went on strike this month.
British Airways, however, said it had no detail from BALPA
on which pilots would strike, and had no way of predicting how
many would come to work or which aircraft they are qualified to
fly, so had no option but to cancel nearly 100% of its flights.
Following strikes on Monday and Tuesday, another day of
industrial action is scheduled for Sept. 27.
BA has been criticised over its communications with
passengers ahead of the strike and the UK Civil Aviation
Authority (CAA) is investigating after it wrongly told some
travellers their flights had been cancelled.
The regulator also reminded BA to tell customers their
rights. During the strikes, it must offer reimbursement for
cancelled flights, alternate travel arrangements under
comparable conditions or a new flight at a later date.
($1 = 0.8119 pounds)
(Reporting by Paul Sandle, Alistair Smout and Michael Holden;
Editing by Edmund Blair, Mark Potter and Alexander Smith)
