Hopes raised for deal between BA and unions

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Hopes of a deal on cutting costs at British Airways were raised today, easing the threat of industrial action which would cause travel chaos for thousands of passengers.

Talks between the airline and union leaders have been continuing for months after BA said it wanted to cut 3,500 jobs and make changes to working practices.

Union officials will meet near Heathrow airport on Friday to be updated on the negotiations, which have been held under the auspices of the conciliation service Acas.

One union source said the two sides were "edging towards a deal", although other officials warned there were still "profound" issues to be resolved, including outsourcing and working practices.

Some union officials believe they have achieved an agreement that job cuts will be voluntary, ending the threat of compulsory lay-offs, which was one of the sticking points in the talks.

"The Acas process has been long and arduous, but it would now be true to say that the unions and the company are edging towards a deal," one source told the Press Association.

But another official said there was only a "glimmer of hope" that a deal will be achieved.

There have been a number of sticking points in the long-running negotiations, including a serious disagreement over the outsourcing of jobs and concerns over the prospect of compulsory redundancies as well as arrangements for consulting unions over job losses.

Unions are understood to have offered to agree changes on a temporary basis until the economy and the airline's prospects improved, but BA was believed to be holding out for permanent changes.

Pay cuts were agreed with leaders of BA pilots in June, and the airline announced that almost 7,000 staff had applied for voluntary pay cuts, including 800 who said they would work unpaid for up to a month.

Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work, which the company said would save up to £10 million.

Chief executive Willie Walsh worked unpaid for the month of July, and BA's cabin crew offered to take a 2.6% pay cut and have no salary rise until February 2011 to help achieve millions of pounds in savings.

Unite put forward the offer as part of a series of pay and productivity proposals which officials said would achieve "substantial" savings.

A deadline for agreeing thousands of job cuts and a two-year pay freeze as well as changes to conditions passed without agreement on June 30.

Unite handed out letters to BA shareholders at the airline's AGM in London in July seeking their support for an agreement, while the GMB paraded cages of live lemmings outside the meeting.