BA 'may have to declare itself bankrupt'

A LEADING actuary has warned BA may have to declare itself bankrupt to deal with its £1.4 billion (€2.03bn) pensions deficit.

Donald Duval, chief actuary at Aon Consulting, said the shortfall was in relation to benefits members had already accrued.

He said this could be reduced by the company paying more into the scheme, but the only way to get rid of it was for BA to declare itself bankrupt.

"In the US that is what they do when they have an unaffordable deficit."

He said US airlines such as Delta and United Airlines had already done this.

"This means BA is competing against airlines that don't have a pensions deficit. If they don't do that (go bankrupt) they will have to cost-cut hard to remain competitive."

A BA spokesman said: "This is the most ludicrous proposal imaginable to resolve our pensions deficit.

"It will come as no surprise to those people living in the real world that this is not under consideration.

"We are one of the most profitable airlines in the world and have nearly £2 bn (€2.92bn) cash in the bank. We want to find an acceptable solution to the pensions deficit that secures pensions for our staff and the future of our business."