UK - A pay and pensions claim by British Airways' pilots could ruin the airline, City analysts warn.
The British Air Line Pilots’ Association (Balpa) says BA has already agreed that pilots will be able to accrue benefits on up to 80% of earnings, up from 50% at present. BA insists the talks are still ongoing.
At present up to half of pilots’ pay is comprised of variable allowances. Balpa says these variables will now be incorporated into pilots’ basic pay. Pilots earn between £30,000 for new entrant co-pilots to £130,000 for captains.
But City analysts – who are already concerned at BA’s £1.5bn FRS17 deficit – believe the company simply cannot afford the deal.
One analyst said: “This is storing up huge problems for the future, and they could be big enough to bring down the company. It means that the amount that pilots are getting at the end is going to increase by 33%.
“If that builds up over time – it won’t be retrospective – but if you flash forward five years, the value to its liabilities will have increased by a lot more.”
A source at British Airways said that while the company had agreed to move some elements of pilots’ salaries from variable to fixed pay, this was non–pensionable – a claim which is disputed by the union.
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