British Airways’ main pilot union has reacted cautiously to proposals made by the airline last week to address its pensions deficit, but has indicated that the financial terms may prove a bigger stumbling block than the issue of later retirement ages.

BA plans to raise the retirement age of its pilots and cabin crew to 60 and 65, respectively, and plans to make a payment of £500 million ($875 million) into its pension scheme to help clear its £1 billion pensions deficit.

BA’s plan to limit increases in pensionable pay to no more than the UK retail price index (RPI) has come under fire from the British Air Line Pilots Association (BALPA), which represents around 2,800 of BA’s 3,000 pilots. However the union concedes that some of the proposals are welcome and that they are generally “open to discussion”.

BALPA is “worried that the proposed RPI cap on future pensionable pay increases will have an impact on its members’ accrued benefits, as well as future service, and that there are no proposals for improvements to pension arrangements of recent and future BA pilot recruits”.

BALPA general secretary Jim McAuslan adds: “Over the next few weeks we’ll meet members to share the findings and discuss our next steps.”

BA chief executive Willie Walsh says the changes mean “working longer to get a similar annual pension, but one that is more secure”.

Source: Flight International