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British Airways reveals plans to close pensions hole

British Airways is to ask employees to work longer and accept a cap on company contributions to pension schemes after it revealed a pension shortfall of GBP2.1 billion.

The estimated deficit has more than doubled since an assessment three years ago despite increasing contributions from the company.

British Airways (BA) now wants its cabin staff and ground staff to work until they are 65 years old rather than the previous 55, while the retirement age of pilots will rise from 55 to 60 under the proposals. BA has promised a one-off GBP500 million payment to help close the deficit if staff agree to the changes.

The proposals have angered unions, with suggestions that industrial action may be resorted to.

BA chief executive Willie Walsh was quoted in the Guardian newspaper as saying: The issue has to be resolved and the trustees have indicated that they want this resolved by November. We have got to get this issue behind us. We cannot ignore it and to ignore it puts the long term viability of British Airways at risk.