Holidaymakers could face a summer of flight chaos after Gatwick staff rejected British Airways' latest pay offer.

The breakdown in negotiations could lead to flights being grounded during the height of the holiday season at the end of August and into September.

Union leaders said BA's 8.5 per cent three-year deal for baggage handlers and check-in staff was completely unacceptable.

Ninety-eight per cent of GMB union members turned down the proposed deal and are now seeking a full strike ballot.

The move follows the breakdown of talks last week between BA and the giant Transport and General Workers Union (T&G) concerning 8,000 ground staff and baggage handlers.

The T&G is considering its options, which include a ballot for industrial action.

Brendan Gold, T&G national secretary for civil air transport, said: "BA has to realise the contribution of these key groups of workers must be valued."

Thousands of passengers were stranded at Gatwick five weeks ago after a computer failure jammed check-in desks.

All flights from the Sussex airport's south terminal were affected as technicians struggled to restore the system.

Most early flights were delayed as check-in staff were forced to revert to checking passengers' baggage manually.

Two weeks earlier holidaymakers endured a day of chaos when an air traffic control computer system crashed. Planes across the UK were grounded and although that fault was also fixed an hour later, flights were delayed all day.

BA has also offered ground staff a second pay rise option over three years or 10.5 per cent over three years but with the condition that the higher figure would not count towards pensions.

Ed Blissett, of the GMB, said: "Both offers are completely unacceptable to the people who keep BA flying."

A spokesman for BA said: "We believe our pay offer is fair and reasonable."

The company is considering involving conciliation service Acas.

Thursday July 22, 2004