British Airways in deal with unions on pension fund issue |
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Published
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Mon, 08 Jan 2007 10:12
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LONDON: British Airways Plc. has concluded an agreement with its four trade unions evolving a consensus on a package of reforms to tackle the 2.1 billion-pound deficit in its pension fund.
The airline said Saturday under the deal, it will make a one-off contribution of 800 million pounds into the fund and annual contributions of 280 million pounds in the next 10 years. The deal is being recommended by the British Airways Forum, an apex body of the four major trade unions, to its constituents, which will in turn consult members formally.
The deal ends months of talks between the management of the airline and the trade unions to end a threat of industrial action.
The airline said the New Airways Pension Scheme will reduce the deficit by more than half to 900 million pounds with a one-off employee saving of 400 million pounds and changes to future benefits.
Chief executive Willie Walsh said together with the NAPS trustees and staff a shared solution has been evolved that will help secure the pensions of the 33,500 NAPS members and remove 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," he said in a statement.
The airline said details of the arrangements will be revealed Monday.
Analysts said the agreement will ultimately pave the way for the airline now to focus on upgrading its fleet by retiring old Boeing jets and replacing them with more fuel efficient planes.
Meanwhile, the Transport & General Workers Union is seeking members' opinion on a strike by 11,000 cabin crew of the airline demanding better working conditions. A ballot is scheduled for Friday.
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U.K. government to announce liberal pension scheme 