UK - British Airways scheme members fear the airline will demand extra employee contributions to help it plug its escalating FRS17 deficit.
BA’s New Airways Pension Scheme had pretax liabilities of £1.5bn at the end of March, compared to £488m the previous year, while its Airways Pension Scheme had a surplus of £418m.
But sources within BA claim the APS surplus has evaporated and it is also in deficit.
Analysts says BA needs to contribute an extra £50m per annum to close its liabilities. A figure which, they claim, it cannot afford and point to its pretax losses of £45m in the first quarter.
BA has been severely hit by the downturn in air travel and a series of wildcat strikes which have cost it an estimated £50m so far.
City sources told PP that BA had hired an external consultant to find ways to plug the deficit, including increases in employee contribution rates.
But GMB negotiating officer Ed Blissett warned that workers would “not be happy” if BA went ahead with such a move.
“This would be the equivalent of a wage cut, and if this were announced as policy, we’d seek negotiations immediately.”
A BA spokeswoman denied the company had hired a consultant or that it planned to seek increased employee contributions.
Watson Wyatt is conducting an actuarial valuation for BA final salary schemes, due next month.
“No action will be taken until the results are in. That’s when we’ll decide how to tackle this,” the spokeswoman said.
Chairman of the Association of British Airways Pensioners George Bell said that he “would not be surprised” if BA was considering increasing staff contributions and predicted that the trustees would come under “extreme” pressure from both unions and management over the issue.
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