Private Investor: A high-flying BA might even help solve the pensions crisis

It's a little strange to watch a huge national debate take place and not feel that it has anything much to do with me. The Turner report on pensions will make very little difference to me, even if every one of its recommendations is adopted.

I'm too old for the change in the retirement date to make any difference, and I already save like crazy for fear of an old age spent munching cardboard and shivering before an unlit fire.

There are a few of us out there - not many, I agree - who might actually be in danger of overproviding for our twilight years. After all, we may never get as far as that, and you can't take it with you, can you?

I've been greatly helped in these efforts over the past year by the general rise in the value of equities. Almost all the shares I bought at the bottom of the market are well in the money now, and most of the stuff bought during the boom, and before it, is in the black too. If and when the market regains and surpasses its peak - say, a FTSE 100 level of 8,000 - a lot of the pension crisis will dissolve away.

Few companies have rewarded the patience of investors better than British Airways. True, the dividends haven't exactly been flowing out of the company lately, but for those who've bought into the shares on any of its many moments of weakness over the past few years will have seen some very respectable returns. September 11, Sars, bird flu, periodic terrorist outrages all over the globe, the Iraq war, budget airlines, the oil price - you name it, it's knocked BA.

Many flag carriers have gone under, most of the US airlines seem to be technically bust and the British Government shows a distinct lack of interest in securing a level playing-field for what is still a major employer (45,000 souls rely on it). BA is continuing to fly the flag through some terrible turbulence.

It may soon be a rather less big employer than it was, if the remarkable Willie Walsh, the new chief executive of BA, gets his way. He is not a household name yet, but I suspect he will soon be one of those few industrialists - Michael Edwardes, Arnold Weinstock, John Harvey-Jones, Richard Branson and Stelios are others - who will be as well known as, say, the contestants on Big Brother.

The reason is that he is going to take an axe to BA's costs, just as he did at his old employer, Aer Lingus of Ireland. He's already announced that he's going to reduce the managerial headcount by one-third, and that's unlikely to be the end of the matter. The unions will hate it, they'll fight it, and the chaos we witnessed over the Gate Gourmet catering affair will look like a storm in an in-flight coffee cup by comparison. On the telly every evening, defending his position, Walsh will become famous.

He is right, though. In the toughest industry of all there is no room, if we can put it this way, for passengers. The fact that one-third of the management can apparently be dropped without any deterioration in the service suggests that there may be more efficiency savings out there. The unions are too powerful in BA, a throwback to the days when it was a nationalised industry. BA has to compete with some of the most cut-throat old-fashioned capitalists out there, who may or may not project a cuddly public image, but whose attitude to the labour market is decidedly unprogressive.

BA also has to contend with carriers whose governments regard it as a matter of national pride to keep them in the air at almost any cost, and an EU Commission happy to turn a blind eye to hidden subsidies and sharp practice.

If Walsh doesn't sort out BA, then no one will. The shares rallied on his moves - a good sign. Shareholders, the flying public and the more sensible staff should back him all the way.

s.ogrady@independent.co.uk

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