British Airways (BA) insists it is still trying to communicate details of its pensions deficit issue to staff and has not put forward specific proposals on dealing with it, as relations with its pilots about the issue threaten to boil over.
The company is the latest of the UK's blue chip firms to see pensions go to the top of its agenda as it tries to cap its liabilities in the teeth of union opposition to moves that could see large numbers of workers receive reduced benefits.
BA's pilots are talking of strike action seriously for the first time in years as the airline joins other major companies in drawing away from the so-called "final salary" pension schemes that give retirees income linked to their final salaries in employment.
Concerned about possible moves to combat BA’s £1.4 billion ($2.5 billion) pensions deficit, the British Airline Pilots’ Association (BALPA), which represents the majority of BA’s 3,000 pilots, has launched a campaign to safeguard pensions in the company and has outlined its determination to fight on the matter. It is promoting the campaign through this website.
BALPA general secretary Jim McAuslan says: “BA pilots are standing absolutely firm on this issue. I have never known them so determined. They are incensed. From what the company says, they could lose up to 36% of their pension entitlement.”
The union has estimated this figure, based on a move away from pensions linked to final-year earnings to one based on career-average earnings.
‘This is not acceptable,” says the union. “A pension is deferred pay. A promise is a promise, a commitment is a commitment, and BA has to honour its pension pledges to its workforce.”
A BALPA spokesman adds the campaign has been launched and a team of experts assembled to “question and analyse” the case BA makes to us and that it will not take any of its assertions at face value.
“At this stage we want to get round the table with BA and have asked for a meeting. We are waiting for a meeting to be arranged,” he says. “We believe in talking at this stage but ultimately BALPA is prepared to test the mood for action if discussions with BA reach a dead-end.”
But BA hits back at the union’s stance and stresses that it has made no proposals on the issue at this stage.
“It is unprofessional and unhelpful for BALPA to talk of industrial action at this time when the company has not put forward any proposals on pensions yet. Neither have we begun formal discussions with BALPA,” the airline says in a statement.
A spokeswoman for the Oneworld carrier adds: “In October we launched a communications campaign to staff, but it’s not a [formal] consultation.”
She says the aim at this stage is to make everyone aware of the pensions issue. The carrier’s deficit is one of the largest of the companies listed on the FTSE 100 stock market index.
“There is a situation, we’ve got a deficit, and we need to do something about it,” she says. “We are not making any suggestions and not asking for anything [during the communication]. No decisions have been made or proposed.”
BA has already closed its final salary-based pension scheme to new entrants. It offers a defined contribution pension scheme for new employees. New CEO Willie Walsh has already said the pensions issue has to be addressed and resolved.
Source: Flight International