BA refuels pension with cash
UK - British Airways saw its pre-tax profits rise in the six months to end of September, even though substantial payments to the final salary pension scheme reduced its cash position.
Details of the interim results published today for the months between April 1 and September 30 reveal while pre-tax profits are up from £471m (€677m) in the same period last year to £593m, there were heavily reduced by a scheduled £560m cash payment into the £6.5bn defined benefit New Airways Pension Scheme.
Total employee cost at the firm dropped by 7.1% on last year to almost £1.1bn because of reduced pensions costs, and the financial position of the pension fund was helped by income of £26m from its investments.
That said, the firm's cash and net debt totals were hit, said BA, "by payments into the New Airways Pension Scheme (NAPS) and to the US Department of Justice for anti competitive activity", decreasing its cash by £599m compared with March 2007, to £1,8bn.
This £560m payment was scheduled to be made in April , after company and pension scheme officials agreed a deal with union representatives for cabin crew at the beginning of the year to make a total top-up contribution of £800m to the fund. The first £240m was paid in February.