BA pension deficit soars to £2.1 billion

29-09-2006

British Airways has revealed that its pension deficit is set to double to £2.1 billion, despite saying it has increased its own contributions by the same rate.

Talks are underway between airline bosses and union officials to discuss the firm's proposals to address the deficit, which BA admits is a "massive problem".

The deficit in the new airways pension scheme (Naps) had previously stood at £928 million.

BA has said that if current trends were to continue, it would be forced to make contributions between five and 12 times higher than its members.

Among the airline's proposals are that all employees, including pilots, have their retirement age raised ten years to the normal level of 65, as well as putting an inflation cap on future pension increases.

The company's chief executive, Willie Walsh, pledged to make an additional £500 million payment into the scheme if and when the proposals were accepted and implemented.

"The deficit is massive and we must deal with it. I believe our proposal is a fair solution which addresses the funding problem and shares the cost of securing the future of our pensions and BA. The deficit is one of the biggest challenges we face and I am determined that we will resolve it," he said.

But union GMB has said it will not accept a rise in the retirement age, except for workers expecting to retire at 60.

"In a meeting with BA this afternoon GMB will make counter proposals to manage the pensions fund deficit," said Ed Blissett, the national officer for union members working for BA.


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