LONDON — British Airways says it has reached an agreement with pension trustees on a plan to cut the airline’s pension deficits.
The deal, if approved by regulators, is designed to resolve a key issue in a proposed merger with Spanish airline Iberia.
BA said Tuesday its annual contributions to the two pension plans would continue at 330 million pounds ($487 million) per year, plus increases of about 3 per cent a year.
BA says it will make addition contributions if its year-end cash balance is over 1.8 billion pounds, and it has made additional provisions for securing pensions if it becomes insolvent.
The issue was a sticking point in negotiations with Iberia, which can still reject the merger.
BA is losing money, and is locked in a protracted dispute with the cabin crew union over other issues including working practices and travel benefits.