The proposed merger between British Airways (BA) and Iberia could be halted by BA’s soaring pension deficit.
BA revealed earlier this week that its pension deficit now satnds at £3.7 billion.
Under the terms of the agreement, Iberia can walk away from the deal when the gap is anywhere above £3 billion.
A £1 billion deficit in BA’s Airways Pension Scheme and a £2.7 hole at its New Airways Pension Scheme was discovered by an actuarial review.
The airline said it will now work together with its trustees and trade unions in a bid to develop a recovery plan.
BA staff worried about their pensions may consider alternative methods of retirement funding to ease their financial worries.
Equity release plans allows property owners to draw cash from their assets in order to supplement their pension income.
It was also claimed this week that the proposed strikes by BA staff over the festive period could cost the airline up to £30 million per day.
