Originally Posted by beaver eager
On the other hand, lending money is how they make their own profits.
But only if they get their repayments. My point is that a company can't unilaterally decide not to repay it's loans on schedule without serious consequences. Just the same as if I told my mortgage company to go whistle for a year.
BA could borrow the money, but this has been tried elsewhere (M&S), and unless the structure of a pension scheme is changed, the problem just resurfaces at the next actuary's valuation, and you've got the interest payments on the debt as well.
Can I make a subtle but important change to my first reply to you
The net assets of the COMPANY as a percentage of Market cap is irrelevant.
This is what would change when you revalue assets
The net asset of the PENSION FUND as a percentage of Market Cap does have some value in showing the risk to shareholders of a companies obligations.
The most important measure you can get form published accounts is size of deficit divided by FREE cashflow. (Best estimate is operating cashflow less net interest less Depreciation) as this shows how many years it would take to pay off the deficit without hurting the operation, and really does show if "BA can afford to pay"