British Airways heading for a £1bn loss- a record amount?
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Pensions are so " passe" - Suggest we all quit worrying over something that is now water under the bridge.. Save you own cash as neither Ste nor Company can afford the growing problem (population)
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SpeedyG
Pensions are so " passe" - Suggest we all quit worrying over something that is now water under the bridge.. Save you own cash as neither Ste nor Company can afford the growing problem (population)
Indeed, a number of BA pilots (retired or approaching) are seriously considering removing their pension pot from the BA scheme and opting for 'drawdown'.
Could this be a way of partially solving the pensions 'black hole?' There would have to be incentives, maybe.....
Indeed, a number of BA pilots (retired or approaching) are seriously considering removing their pension pot from the BA scheme and opting for 'drawdown'.
Could this be a way of partially solving the pensions 'black hole?' There would have to be incentives, maybe.....
Sweetie:
That would make the pension problem worse... BA has the disadvantage (in comparison with, for example, AF/KL and Lufthansa) that the pension deficit is actually on it's books, hurting it's financial position and ability to generate / borrow cash. At the moment it is a 3.7 billion Pound liability over which negotiation with the fund trustees is possible. The trustees can agree on a 'repair plan' and thereby avoid uncertainty and unrest amongst BA shareholders and creditors.
If everybody actually claims his or her pension pot now BA would have to come up with the cash instantly when they don't have it, and would immediately become insolvent. This is not likely to happen since a move like that would bankrupt both the company and it's pension schemes, leaving all involved with nothing...
The pension deficit is a major problem, though, and needs to (continue to) be taken seriously.
That would make the pension problem worse... BA has the disadvantage (in comparison with, for example, AF/KL and Lufthansa) that the pension deficit is actually on it's books, hurting it's financial position and ability to generate / borrow cash. At the moment it is a 3.7 billion Pound liability over which negotiation with the fund trustees is possible. The trustees can agree on a 'repair plan' and thereby avoid uncertainty and unrest amongst BA shareholders and creditors.
If everybody actually claims his or her pension pot now BA would have to come up with the cash instantly when they don't have it, and would immediately become insolvent. This is not likely to happen since a move like that would bankrupt both the company and it's pension schemes, leaving all involved with nothing...
The pension deficit is a major problem, though, and needs to (continue to) be taken seriously.
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Longhitter,
Are you sure? If any pension fund manager sees an employee leave the scheme before retirement date, then the long term liability stops there. OK they have to payout that employees pot (less a fat fee me thinks) but compared to the amount of money needed to cover that employees life expectancy ......
I know a couple of retired BA pilots who are both fit and healthy and in their late 70's - they could go on another 20 years.
Given a current 55 - 60 year old pilot in good health and earning 100K, no wonder the deficit is so big.
How much would you put aside to cover such a person for potentially 40 years of pension?
Just my take on it.
Sir George Cayley
Are you sure? If any pension fund manager sees an employee leave the scheme before retirement date, then the long term liability stops there. OK they have to payout that employees pot (less a fat fee me thinks) but compared to the amount of money needed to cover that employees life expectancy ......
I know a couple of retired BA pilots who are both fit and healthy and in their late 70's - they could go on another 20 years.
Given a current 55 - 60 year old pilot in good health and earning 100K, no wonder the deficit is so big.
How much would you put aside to cover such a person for potentially 40 years of pension?Just my take on it.
Sir George Cayley
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.
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.
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Three years for airlines to recover from the recession
Mr Bisignani, the iata chief says that airlines will need 3yrs to recover from recession and that BA is expected suffer heavier losses from the period up to March the 31st. Fasten your seatbelts as the bumpy ride continues.
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The large majority of LH´s employees will be insured under the standard compulsory state pension system, in which the premium is a percentage of the employee´s gross salary and of which the employee pays half, while the employer pays the other half into the governmental pension funds. The contributions are deducted by the employer before he pays the net salary to the employee and are paid directly to the relevant pension fund. The liability of LH ends there.
Employees mikght have a supplemental company pension scheme as a perk, but since I haven´t worked for LH since a long time I don´t know any details. Generally with such schemes the employer pays a contribution to a private insurer (and can deduct this from his tax), who later will pay out the pensions.
Only top level employees will have their own, private pension plans.
The same applies to the medical insurance.
Employees mikght have a supplemental company pension scheme as a perk, but since I haven´t worked for LH since a long time I don´t know any details. Generally with such schemes the employer pays a contribution to a private insurer (and can deduct this from his tax), who later will pay out the pensions.
Only top level employees will have their own, private pension plans.
The same applies to the medical insurance.
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@Hamish McBush
No help for Austin-Rover, TVR etc etc
What a nonsensical statement - absolutely worthy of BASSA.
I don't know if you are too young or have severe memory loss, but British Leyland, Leyland Cars. BLMC, Jaguar, Austin Rover and lots of other abbreviations, were kept alive sucking on the state tit for more than 20 + years from the beginning of the 70's.
Fool !
And why the hell would anybody with any grasp of economics want to save TVR ?
Revert to first pithy comment .
No help for Austin-Rover, TVR etc etc
What a nonsensical statement - absolutely worthy of BASSA.
I don't know if you are too young or have severe memory loss, but British Leyland, Leyland Cars. BLMC, Jaguar, Austin Rover and lots of other abbreviations, were kept alive sucking on the state tit for more than 20 + years from the beginning of the 70's.
Fool !
And why the hell would anybody with any grasp of economics want to save TVR ?
Revert to first pithy comment .
Last edited by AlpineSkier; 31st Jan 2010 at 15:42.
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TVR was sold to a rich Russian spoilt brat and not the 'management' buyout that sadly couldn't find the cash within Peter Wheelers time frame.
The said Russian then pulled the plug and the funding. Nothing sinister there, except the fact that the cars were inverse kit cars, you bought it complete and it disassembled itself over time!
BA have good cash reserves and the backing of the city and investors as long as they kick BASSA into touch. The future, once the restructuring has run its course, is for a far better and lower cost base per passenger mile.
Time will tell and, no, there would be no bailout for BA.
The said Russian then pulled the plug and the funding. Nothing sinister there, except the fact that the cars were inverse kit cars, you bought it complete and it disassembled itself over time!
BA have good cash reserves and the backing of the city and investors as long as they kick BASSA into touch. The future, once the restructuring has run its course, is for a far better and lower cost base per passenger mile.
Time will tell and, no, there would be no bailout for BA.
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What about a "Pre-Pack"? Not an an accountant but, as I understand it, the company and its existing or new shareholders decide on a new business plan using some or all of the company's existing assets, decide on new contracts to be offered to those employees it wishes to retain and, when everything's agreed, enters into /emerges from Administration having shed assets, labour and contracts that don't work and, possibly, rescheduled debt too. Presumably it could address the pension deficit too?
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If the company goes to the wall then so be it. They have deserved everything they've gotten. Closing MAN, BFS, NCL etc
I hope BASSA succeed in this, even if it means sacrificing my NAPS pension.
All those defending the company, remind me again how much Eddington, Ayling et al were paid off......
A great company to work for, but terribly managed.
I hope BASSA succeed in this, even if it means sacrificing my NAPS pension.
All those defending the company, remind me again how much Eddington, Ayling et al were paid off......
A great company to work for, but terribly managed.
Last edited by Ex Cargo Clown; 1st Feb 2010 at 12:44.
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Don't get me wrong I wouldn't wish redundancy or job loss on anyone and equally don't doubt that there are numerous employees at BA that are commited to both the company and their customers.
That said after watching the news coverage of the cabin crew wildly celebrating the ballott decision to strike over christmas I resolved there and then I would never fly BA again, that an employee employed to deliver customer service could celebrate the potential disruption caused to said customers holidays left me cold. I'm not an expert of the politics behind the decision and wouldn't be arrogant enough to sit in ignorance and dis-agree or agree with the stike, but to celebrate like a bunch of spoilt kids was unforgivable.
That said after watching the news coverage of the cabin crew wildly celebrating the ballott decision to strike over christmas I resolved there and then I would never fly BA again, that an employee employed to deliver customer service could celebrate the potential disruption caused to said customers holidays left me cold. I'm not an expert of the politics behind the decision and wouldn't be arrogant enough to sit in ignorance and dis-agree or agree with the stike, but to celebrate like a bunch of spoilt kids was unforgivable.
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The pension deficit quoted is exaggerated by the fact that it was last calculated at the lowest point of the recession as far as equity prices were concerned. The old APS scheme is actually well-funded and historically only goes into deficit briefly in extreme conditions. The later NAPS has always been under-funded but is not as bad as the last valuation shows now there has been a significant recovery in equities.
Not saying there isn't a problem, just that it's not terminal.
Not saying there isn't a problem, just that it's not terminal.
A great company to work for, but terribly managed.
FWIW my take on BA is:
1. it was so successul in the Eighties, just ater privatization, that its old-fashioned union-dominated working practices were not challenged. Now the cost of that luxury is coming home to roost.
2. Under no circumstances will it be bailed out if it has terminal problems.
3. The person who made the biggest contribution to the pension deficit was one G. Brown, who has raped all private sector pension schemes since 1997.
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It's about time Ryanair took over BA and turned it into a profit making machine, Personally I never fly withy BA, with the exception of some good guys I know, too many have their heads stuffed up their rear end.