British Airways defers £450m of pension payments as Covid cuts flights
British Airways has struck a deal to delay £450m of pension deficit contributions as the company struggles through Covid travel restrictions that have left most of its planes grounded during the pandemic.
The carrier’s owner, International Airlines Group (IAG), has also reached a final agreement over a £2bn loan that will give the company a larger financial cushion until Covid restrictions are eased.
BA, which usually pays £37.5m a month into the New Airways Pension Scheme (NAPS), has struck a deal with trustees that will allow it to delay its contributions until September 2021. The airline was allowed to temporarily suspend its payments throughout negotiations, meaning it has not been contributing to the scheme since September last year.
The formal extension means it will have deferred payments for 12 months in total, helping preserve £450m in cash.
“In addition to these arrangements, IAG continues to explore other debt initiatives to improve further its liquidity,” the company said in a statement. IAG’s shares closed up more than 7% at 178p.
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