Tue, Oct 11, 2005
This Time, Over Plan To Overhaul
Airline's Pensions
Stop us if this sounds like something from OUR side of the
pond...
British Airways plans to pick up the pace of overhauling its
pension plan, a move that is certain to embitter some BA workers
and could even spark more strikes in Europe.
The airline's new CEO, Willie Walsh, recently sent a letter to
employees, warning that the company's pensions would likely be
revised in January, according to a BA spokesman who spoke with the
Daily Mail on Monday.
As Aero-News reported in real time August 12th, BA
flights throughout Europe were grounded when baggage handlers and
others staged a wildcat strike at Heathrow. They walked out in
sympathy with hundreds of Gate Gourmet workers who were summarily
fired the previous Friday.
The British flag carrier's pension plan is currently underfunded
by an estimated $2.46 billion and it's number one with a bullet on
Walsh's list of things to address as he takes control of BA. More
than likely, British press reports indicate, Walsh will over two
simple alternatives: Increase your pay-in or reduce your pay-out.
There appears to be no third choice in the short-run.
British Airways, however, denied reports that it would offer
employees a cash bonus if they opted out of the pension plan
altogether.
"Company contributions cannot be increased if it is to invest in
new people, planes and new products," BA said in an internal
statement obtained by the Daily Mail.
The problem appears so dire that BA is reportedly considering
resurrection of its failed merger plans with American Airlines.
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