The deficit on British Airways’ pension fund has virtually doubled to around 2 billion pounds ($3.7 billion), according to a new valuation being carried out by actuaries, newspapers reported on Sunday. Actuaries put BA’s pension deficit at 928 million pounds following the airline’s last three-year review in 2003.
BA declined to comment on the pension fund deficit valuation. BA said in May that its own accounting valuation of its main pension scheme showed a deficit at March 31 of 2.07 billion pounds, up 101 million pounds on the previous year. A spokesman for the fund’s trustees was not immediately reachable for comment.
The Sunday Times said the airline planned to sell its Air Miles customer loyalty scheme to private equity firm European Capital as part of a series of disposals aimed at raising cash to fund the pension deficit, which has been swollen by lower interest rates and longer life expectancy.
In an unsourced report, the paper said European Capital was expected to pay 25 million pounds ($46.2 million) for the loyalty scheme in a complex transaction which will allow BA to take up to 200 million pounds out of the company and provide flights in return.