Retirement Age Biggest Obstacle

British Airways' labor unions walked away from the table on Thursday without reaching an agreement on the pension fund. The airline can't reach an agreement with its unions over retirement age.

BA's pension fund is nearly $4 billion in the hole and it's asking its employees to help make up the difference.

Unlike some US airline unions, BA's pilots want to retire younger. Previous agreements had the retirement age at 55, but new ICAO rules allow pilots to fly until age 65 - and that's what BA wants. The company stands to save a substantial sum of money by keeping employees working longer.

The pilot's union is fighting to keep the retirement age at 60. The airline says if pilots want to retire at age 60 instead of 65, they must increase their contributions to the company's pension fund from 6.5% to 11.25%. The rate would decrease to 10% thereafter.

BA's chief financial officer Keith Williams told Guardian Unlimited, "We are giving everyone the option to retire at 60, but they are going to have to pay for it."

Labor unions say they'll take a hard line unless the airline bends. Union spokesmen say BA is asking for too much money in the way of contributions and members refuse to work until age 65 adding "industrial action" may be workers' only resort. According to our sources, that's brit for "strike."

A pilot's union rep says it and the airline are still a way apart, and its members remain resolute in their demands.

FMI: www.britishairways.com