UK - BA has admitted that it will have to increase contributions into its £9bn schemes after watching its pretax FRS17 deficit jump to £1.7bn from £488m last year.
BA posted net debts of £5.1bn and pretax profits of £135m, which it attributed to “cost-cutting measures” taken in response to the slowdown in the airline sector.
Analysts believe that at £1.7bn, the deficit is now larger than the company itself, and that when combined with its high debt and “weak” trading results, BA will struggle to fund it.
Last year, the firm put £127m into both the Airways Pension Scheme and the New Airways Pension Scheme.
One leading analyst said: “BA has everything going wrong for it – poor operating performance, high debt and a pension problem.
“When the latest actuarial results come out in the autumn, BA will have to increase contributions or bury their heads in the sand by attempting to defer it.”
A BA spokeswoman said: “This is an issue for the future, which we will address when the time comes.”
She said actuarial valuations on the APS and NAPS – which are being carried out by Watson Wyatt – would be completed by the end of the year.
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