0A,
That is not true. Only company pension contributions go on the books for AF, KL and LH but the values of their actual pension funds do NOT.
AF:
Employees and AF pay into national (state-governed) pension fund for all aircrew of all french airlines (cabin and pilots). Value of the fund is not on the AF books, only contributions are. AF is not liable for pensions if the fund collapses.
KL:
Employees and company pay into private pension funds that are independent but under supervision of the dutch national bank. Value of the fund is, again, not on the KL books and the only liability for the company is contributions.
I believe the situation is similar for LH, but I am not 100% up to speed on them.
The situation is definitely different for BA where both contributions and the actual value of their pension funds ARE on the books, and Iberia can even pull out of the merger if the pension deficit is not adressed to their liking.
Paying out pension pots might be cheaper in the long run, but if enough people decide to cash out now I wonder if BA has enough of it. Generating or borrowing money is very difficult for BA at the moment. A pension fund needs cash to generate cash through interest and return on investment. The BA pension funds are already 3.7 billion Sterling short, and that's 3.7 billion not generating any profit or interest to cover liabilities. If people cash out it will reduce future liabilities, but also further hurt necessary fund growth in the short run.
Last edited by Longhitter; 31st Jan 2010 at 12:29.