BA unions vow to oppose cuts in pay and pensions

Unions at British Airways warned yesterday that they would fight any attack on pay and pensions benefits as the airline unveiled plans to cut staff costs by a further £300m over the next two years.

The plan involves a 30 per cent cut in employee costs among the 8,000 staff who work at BA's Waterside headquarters and in support functions. There will be a further 15 per cent cut in costs among the 38,000 operational staff.

Rod Eddington, BA's chief executive, declined to put a figure on the number of job losses that would result although industry estimates have put it at 3,000-4,000. But he said it remained the airline's aim to achieve the manpower savings through voluntary means such as unpaid leave, early retirement, part-time working and non-compulsory severance.

The latest cost savings come on top of the 13,000 jobs BA has shed since 11 September 2001. Mr Eddington said that although the outlook for revenues was slightly better, BA's cost base still remained too high.

In addition to job cuts, unions fear that BA will also seek to keep pay increases close to inflation and save on pension costs by increasing employee contributions. It has already closed its final salary scheme to new members but even so has seen company pension contributions increase by £150m.

The GMB union, which represents 4,500 employees at BA, said it would oppose any attempts to curb pay and pensions further. "BA continues to have a problem with low pay which is particularly concentrated in their front-line staff," the union's national airports officer, Allan Black, said yesterday. "Any pay talks will have to take this seriously into account." He added that the GMB did not accept that higher employee contributions into BA's pension scheme were the way forward.

Mr Eddington said management would sit down with the unions to discuss pay and pensions. He also said plans for a new bonus scheme based on profit sharing would be taken to the board. BA has not paid a profit share since 1996-97.

BA is likely to tread carefully in its pay talks following the devastating wildcat strikes last summer prompted by attempts to introduce "swipe cards" for ground staff at Heathrow.