BA proposes a hike in retirement age for pilots and cabin crew

BA proposes a hike in retirement age for pilots and cabin crew

	Published : Thu, 23 Mar 2006 13:15 By : Paula Demarzio Print this Story

LONDON - Europe's third largest airline, British Airways PLC has announced that it will increase the age of retirement of pilots and other staff including cabin crew and will contribute £500 million to the pension fund, which is facing a deficit of close to £1 billion. Under the proposals revealed today, the retirement age for pilots and cabin crew will increase to 60 years from the currently prevailing 55 years.

The airline also informed unions that the retirement age for cabin crew would rise to 65 years over the next five years. The airline added that it would keep a final salary pension scheme and will not change the pension benefits already earned by the employees. BA Chief Executive Willie Walsh said the company's contribution to the pension scheme would be made from cash reserves, "After the changes are accepted, the airline will make a payment of 500 million pounds into the fund.

This is on top of the 350 million pounds the company will have paid towards the past deficit by December 2006," he added. These proposals are being initiated after months of talks with almost 34,000 pension scheme members. The proposals will now be placed before the unions and BA's pension scheme trustees for approval. Walsh was confident that they would be accepted, "These changes are necessary to clear the past deficit and to contain the amount of future funding needed. It means working longer to get a similar annual pension, but one that is more secure.

This should address the pension problem at British Airways once and for all," he stressed. The unions have reacted with caution, Brendan Gold, T&G union national secretary, said that BA should not put any conditions on contributing £500 million since it was already saving £800 million by cutting about 13,000 jobs, "It was no secret that BA's pension funds were in deficit, but we still don't really know if today's measures will be the right ones for our members and for the scheme," he added. In the backdrop of this news, shares in BA rose 4.5 percent to 377 pence in early trading.