British Airways said today that it had agreed a recovery plan for its underfunded pension schemes in a move which paves the way for its merger with Spanish rival Iberia.
The embattled airline said its agreement with pension trustees would avoid closure of the two final salary company pension schemes - which together have nearly 100,000 members.
It aims to pay £330 million a year, rising in line with inflation, until 2023 and 2026 for the two schemes to plug a gaping £3.7 billion deficit.
But members will have to either pay more to maintain the same benefits, or see their pension pots reduce.
BA will submit the plans to the Pensions Regulator by the end of June and Iberia now has three months to consider the pensions deal.
The pension recovery programme had been a major sticking point in the Iberia merger and Iberia still has the option to call off the tie-up if it does not agree with the arrangement struck with trustees.Reuse content