BA forges deal on £2.1bn pension black hole
British Airways is likely to go ahead with long haul fleet renewal after hammering out a deal with unions to tackle a £2.1 billion pensions black hole.
The airline has said that replacing older aircraft would only happen once the pensions issue had been resolved.
Four unions agreed on Friday to recommend changes to its New Airways Pension Scheme (NAPS), which has a £2.1 billion deficit.
The unions are recommending acceptance of the proposal and will now consult with members formally.
BA has agreed to make a one off contribution of £800 million into the fund subject to acceptance of benefit changes. Together with a one-off employee saving of £400 million and changes to future benefits, the NAPS pension deficit will be reduced by more than half to £0.9 billion and the company’s annual contributions will be around £280 million a year for the next 10 years, said said.
Chief executive, Willie Walsh, said: “This is great news. Together with the NAPS Trustees and staff, we have found a shared solution that helps secure the pensions of our 33,500 NAPS members and removes a major blocker to future investment in British Airways.
“This brings the NAPS deficit and ongoing contributions to a level which is affordable by British Airways and effectively tackles one of the most fundamental issues we face.”
But the airline faces the prospect of disruption as 11,000 cabin crew members of the Transport & General Workers Union vote this week for industrial action over new working practices. A decision is expected on Friday.
Report by Phil Davies
Phil Davies
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