British Airways could face strike action from the 17,000 pension scheme members, after announcing plans to close its defined benefit scheme.
Employees will no longer see their retirement payout increase in line with their salary and the duration of service, with the airline blaming low-interest rates and rising life expectancies for the increase in the pension scheme’s deficit.
Following the news, Unite and GMB trade unions have threatened further strikes.
“Unite and GMB within British Airways must express on behalf of our members and in the strongest possible terms, both our dismay and bitter disappointment. Thousands of loyal and long-serving staff, who have helped build British Airways into a world-class flag carrier for this country and one of the most recognisable global brands, now face uncertainty in their retirement,” said the unions in a joint statement.
“Both unions jointly demand urgent talks to discuss both the impact of this announcement, if a solution can be found and, if not, the consequences the airline may face,” they added.
The air ine has seen 85 days of industrial action so far this year.
British Airways said: “In 2017 alone the airline will pay £750 million in pension contributions and has already committed to provide between £300 million and £450 million a year till 2027 to address the Naps deficit. If Naps remained open to future accrual, the cost to the company of providing future benefits to Naps members could rise to 45 percent of individuals’ pensionable pay in 2018 – more than four times the typical employer contribution of UK airlines.”
Talks are expected between the airline and unions in the next few weeks. Chief executive of BA’s parent company IAG (LON:IAG), Willie Walsh, has already found himself a reputation for taking a tough stance against trade unions.