Scottish Daily Mail

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UNDER former boss Rico Back, Royal Mail had been grappling with tumbling letter volumes and the need to shift more of its business towards parcels.

That was complicate­d by his strained relations with the highly-unionised workforce, however, which strongly opposed changes the German executive tried to bring in.

But after Back was dispatched last month, there may be a reset of relations under executive chairman Keith Williams.

The former British Airways chief is a veteran of industrial disputes, credited with defusing a massive row with cabin crews in 2011.

But repairing relations with the Communicat­ion Workers Union will only get Williams so far, because overhaulin­g Royal Mail’s operations for the modern age remains a formidable challenge. The UK business has lagged recently, failing to make the productivi­ty gains hoped for by management.

Back often said, to cushion every 1pc decline in letter revenues a 2pc increase in parcel revenues is needed. But ahead of full-year results this Thursday, analysts at Credit Suisse said they expect letter revenues to decline by more than predicted – so Royal Mail may once again take one step forward but two steps back.

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