UK - KPMG has taken over as auditors at British Airways' €14bn New Airways Pension Scheme from Ernst & Young - severing a link with the company's own auditor.

"As part of the trustees' process of routinely reviewing scheme advisors, the trustees have formally appointed new auditors KPMG LLP to replace the previous auditors, Ernst &Young," said trustee chairman Roger Maynard.

He added:  "The trustees were content with the services supplied by Ernst & Young and the changed was made in order to take advantage of additional resources that KPMG can offer in provision of information and advice.

"At the same time, changing auditors establishes a position of transparency and independence from the firm that audits British Airways' own accounts,

The statement confirmed that the deficit in NAPS "has indeed grown" from the £928m reported in 2003, though there were no further details. Media reports have said the deficit has doubled to £1.8bn.

It said the actuary, Watson Wyatt, has found clear evidence that "all categories of beneficiaries are living longer and that the improvements in life expectancy are growing quicker that previously assumed".

"So, even if no future mortality improvements are assumed we still have increased liabilities."

Maynard noted that BA has "other non-cash assets" which could provide security to the scheme. There has been speculation that the airline could sell off Air Miles to help ease the deficit.

And he also disclosed that the Pensions Regulator is "taking a keen interest" in the work the trustees are doing, and that it has met their representatives on two occasions in the last couple of months with more meetings planned.