BA halves pension deficit
UK - Savings from changes to pensionable pay plus the finalisation of an £800m cash injection brought British Airway's (BA) £2.1bn (€3.1bn) deficit in the New Airlines Pension Scheme almost down to £1bn.
By capping pensionable pay at inflation, the company saved £369m according to its latest full-year results.
The one-off payment agreed under a pensions deal in January of this year was made in two instalments. In February, BA injected £240m in February and the rest was paid in April.
BA commented the "shared solution has helped bring the deficit and ongoing company contributions to an affordable level".
Under the deal negotiated with all four unions in the Airline - GMB, Amicus, Balpa and T&G - the company will also make annual cash contributions of up to £240m over the next ten years.
In return, staff had to accept benefit reductions although NAPS remains a final salary scheme .
These cuts include a raise in the normal retirement age to 65, a lower accrual rate, inflation capped pensionable pay increases, capped pension increases on retirement and sharing life expectancy.
The scheme closed to new members in 2003. Nevertheless, the deficit more than doubled from £928m that year to £2.1bn in 2006.
Group profit for British Airways before tax for the year was £611m, a decline of 0.8% compared with £616m in the previous year.