British Airways has sparked controversy by admitting it could close its salary pension scheme to 100,000 existing members as part of a programme to stem record losses, and smooth the way for a merger with Iberia.
Concerns over the pension liability on BA’s balance have been a major stumbling block in its all-share merger talks with Iberia. The Spanish airline has requested a adjustment mechanism to protect it from any increase in the deficit.
The UK flag-carrier said that all options to confront its pension deficit would be reviewed, despite it risking a fraught confrontation with the workforce.
A spokesman for the airline said: “When the actuarial review is completed, we will have discussions with the trustees. We expect then to discuss with the trustees how the schemes should be funded in the light of the valuation findings. We will explore all options as part of a funding review.”
He stressed that closing the scheme was not under active consideration, saying: “It is premature to suggest that we would go down any particular route.”
On releasing its full-year results last month, BA estimated that its two final salary schemes - the Airways Pension Scheme and the New Airways Pension Scheme - had a £2.9bn deficit, up £1.2bn from previous estimates.
The carrier is currently contributing around £320m a year to the two schemes - a sum that has grown with the slump in equity markets.