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BA pension deficit to hit £2.1bn BA pension deficit to hit £2.1bn
(40 minutes later)
British Airways has warned that its pension deficit is set to double to £2.1bn ($3.9bn).British Airways has warned that its pension deficit is set to double to £2.1bn ($3.9bn).
Bosses at the airline were meeting union officials to discuss plans to tackle the pensions black hole - which was previously put at £928m.Bosses at the airline were meeting union officials to discuss plans to tackle the pensions black hole - which was previously put at £928m.
The widening deficit comes despite BA doubling its contributions and a recent recovery in the stock market.The widening deficit comes despite BA doubling its contributions and a recent recovery in the stock market.
BA's proposals include raising the retirement age to 65 and capping pay rises to the rate of inflation.BA's proposals include raising the retirement age to 65 and capping pay rises to the rate of inflation.
'Fair solution'
The deficit is massive and we must deal with it Willie Walsh BA Chief Executive Check BA's share price
The airline plans to keep its final salary pension scheme, with no increase in staff contribution rates, and will make a £500m one-off payment if unions agree to new arrangements.The airline plans to keep its final salary pension scheme, with no increase in staff contribution rates, and will make a £500m one-off payment if unions agree to new arrangements.
However, GMB national officer Ed Blissett said his union would "not accept raising the retirement age to 65 for those who expect to go at 60".However, GMB national officer Ed Blissett said his union would "not accept raising the retirement age to 65 for those who expect to go at 60".
Separate proposals to manage the pensions fund deficit were planned, the union said. Separate proposals to manage the pensions fund deficit were being planned, the union said.
BA's chief executive Willie Walsh said the company's proposal was "a fair solution"
"The deficit is massive and we must deal with it. It's one of the biggest challenges we face and I'm determined that we will resolve it," he said.
A report by accountants PricewaterhouseCoopers, commissioned by BA pension fund trustees, has suggested that the airline could afford to pay more than a lump sum of £500m into the pensions deficit.
But the report said BA could not afford annual contributions of more than £240m, well below the amount needed to pay down the deficit for past pensions as well as future needs.