Christmas travellers face misery after British Airways ' cabin crew voted to mark their own 12 days of Christmas with a strike over the festive period. And in what looked like an unfortunate piece of news management, the company and its pension-fund trustees confirmed on the same day that the hole in the company's pension scheme has opened up into a £3.7bn chasm.
The deficit was at the more pessimistic end of what the City had been expecting, and the trustees and the company must now agree a recovery plan by the end of June next year to determine the level of additional contributions needed to close the gap. BA already pays £330m a year into the scheme and management will be reluctant to increase that at a time when the airline is losing so much money.
Matters are also complicated by the view of the pension's regulator, which must sign off on any agreement before it can take effect. So far it has not seen enough information to be comfortable with the provisions that BA has made.
In the short term, BA is facing an embarrassing Christmas period of cancelled flights and lost customers unless it can resolve its cabin crew's concerns within the next few days. Analyst Andrew Fitchie of Collins Stewart estimates the cost of the strike to the airline at between £10m and £30m a day in what is one of its busiest periods outside the summer high season.
Price: 126p
When: 25 June 2009
