BA to hold talks with unions over pensions deficit |
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Thu, 16 Nov 2006 11:50
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LONDON - British Airways is slated to hold talks with unions on how best to tackle its £2.1 billion pensions deficit. The airline has already announced that it would be increasing the cash injection into the pensions account to £800 million.
"The £800m cash payment into Naps [the pension scheme] is a very significant injection into the fund relative to the company's market capitalization," said BA's chief financial officer Keith Williams. "Together with the benefits changes, more than half the deficit will be tackled immediately."
The airline is also thought to be ready to pay £50 million annually if the representatives agree to proposals that will slightly alter future benefits. BA staff has also been offered inflation-capped pay rises as well as an increase in retirement age to 65 instead of 60.
The Transport & General Workers' Union did not comment on these proposals, but Amicus said BA was undermining the talks. "The announcement is inappropriate and undermines the significance of the obligation to consult the trade unions, who after all represent the BA workforce," said Brian Boyd, Amicus regional officer.
TGU represents 20,000 of BA's 45,000 staff, while Amicus represents 8,000.
But Mr Williams said the announcement of extra cash injection should be welcomed by the trade unions. “We’ve always said we’re willing to consult with the trade unions on the changes that will be implemented. This should be seen as good news by the trade unions because we’re significantly increasing the company’s contribution," he added.
BA shares rose 4.7 per cent to 485 pence after this announcement.
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