BA Air Miles may plug pension gap

LONDON - British Airways is mulling the sale of its Air Miles customer loyalty scheme to help fill a pensions deficit that could be twice as big as first thought, media reports say.

The shortfall in its retirement fund has almost doubled to nearly £1.8 billion ($5.36 billion), according to new valuation.

It is understood that actuaries Watson Wyatt have revised an initial estimate of £928 million to just under £1.8 billion in a move that could force the airline to top up the fund.

Last week, BA confirmed plans to pay £350 million into its final salary scheme, which it shut to new members in 2003.

It has offered to inject £500 million in return for concessions from workers on retirement ages.

One report said Watson Wyatt had already presented a first draft to pension fund trustees. BA said that a sale of Air Miles was one of the options being considered for the scheme that it bought in the 1990s.

- INDEPENDENT