IAG: BA restructuring may cost 12,000 jobs
Plastic787
really interesting direction this thread has taken. i hadn't considered the fact that fixed costs don't scale directly with the business size (eg finance on owned airframes where the airframes themselves have significantly devalued) which will make the business fail at a certain revenue level that would be generating good profits for a smaller business. however the slots at LHR arent part of that, if BA can't utilise them and they have to use it or lose it, then it's time to sell the slots.
(or Buy a fleet of Senecas and start up regular services to Fairoaks and White Waltham. )
really interesting direction this thread has taken. i hadn't considered the fact that fixed costs don't scale directly with the business size (eg finance on owned airframes where the airframes themselves have significantly devalued) which will make the business fail at a certain revenue level that would be generating good profits for a smaller business. however the slots at LHR arent part of that, if BA can't utilise them and they have to use it or lose it, then it's time to sell the slots.
(or Buy a fleet of Senecas and start up regular services to Fairoaks and White Waltham. )
I just don’t believe aviation is a shrinking industry the same way as Kodak or Car plants. Even with climate thoughts, the world is shrinking and global travel is key on everyone’s expenditure plans each year. Being a wet island nation I don’t believe the return of the U.K. holiday will be making a long term comeback.
the only thing stopping aviation being viable is government restrictions. Just like the wedding events industry. Granted maybe they will be a cut back in business travel for a period, but even that will return. The struggle for BA et al will be their business offering. If they can make it more appealing to the holiday market maybe they can make it work still.
the only thing stopping aviation being viable is government restrictions. Just like the wedding events industry. Granted maybe they will be a cut back in business travel for a period, but even that will return. The struggle for BA et al will be their business offering. If they can make it more appealing to the holiday market maybe they can make it work still.
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They'd have to find someone willing to buy them at anything like a value that would actually make it worthwhile to sell them. I wouldn't have thought that to be an easy task in the current climate.
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Nobody has mentioned the "elephant in the room".
It's all well and good making 12,000 staff redundant to save money, even though I vehemently disagree with it , but then there also is the gigantic pension deficit that has been accrued. That should be more of a concern. If staff over 55 are forced into CR it will be chaos unless IAG has a moneytree growing at Waterworld.
It's all well and good making 12,000 staff redundant to save money, even though I vehemently disagree with it , but then there also is the gigantic pension deficit that has been accrued. That should be more of a concern. If staff over 55 are forced into CR it will be chaos unless IAG has a moneytree growing at Waterworld.
Ex Cargo is spot on.
BA always was a little airline with a huge pension deficit.
It is now even smaller, and has a bigger deficit.
I wonder who is managing the Pension Black hole at BA??
How on Earth will they afford to make the agreed special contributions? Not to mention the new special contributions which will be required.
BA always was a little airline with a huge pension deficit.
It is now even smaller, and has a bigger deficit.
I wonder who is managing the Pension Black hole at BA??
How on Earth will they afford to make the agreed special contributions? Not to mention the new special contributions which will be required.
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Johnny tax payer to the rescue? https://www.ppf.co.uk
Ex Cargo Clown
I don't know the conditions of the BA pension scheme, but, on the basis of other large public companies, find it very unlikely that pensions could be drawn before retirement age ( usually 65 ), and if so, see no difference if CR happens. No doubt someone will inform me if I am wrong.
I don't know the conditions of the BA pension scheme, but, on the basis of other large public companies, find it very unlikely that pensions could be drawn before retirement age ( usually 65 ), and if so, see no difference if CR happens. No doubt someone will inform me if I am wrong.
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Pensions can be drawn up to ten years prior to the individual’s state retirement age. Someone drawing their pension early makes no difference to the fund’s liabilities though, so I am unsure why redundancies would alter those liabilities. I suspect we will actually see the fund’s liabilities reduce in size at the next triannual valuation because the life expectancy figures will have come down considerably.
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Although NAPS has a large deficit it is being managed, early retirements will have to be funded in the sense that a VR, who will only be going with a pension, will need the scheme to crystallise this money internally This means BA will have to fund any outstanding deficit pertaining to that person now.
This may have been a factor during the past negotiation
The CR people were junior and would not have been a cost as they would have been in money purchased schemes.
Of course any future retrenchments may drag in more senior CR/VR NAPS members, and could be a major cost
This may have been a factor during the past negotiation
The CR people were junior and would not have been a cost as they would have been in money purchased schemes.
Of course any future retrenchments may drag in more senior CR/VR NAPS members, and could be a major cost
Tartiflette Fan
A company/private pension can be drawn without penalty at age 55. NAPS and APS are now deferred pension schemes. yes, they are in deficit but they are no longer linked to final salary. They are essentially a finite cost . That's why they have been closed.
What is interesting is the size of the CETV currently being offered. Well in excess of the actual individual fund 'values'. This suggests to me that the fund owners are trying to rid themselves of liabilities. IE Current staff.
What is a real fear (to me at least) is that if BA cannot access their biggest market very soon, they will not survive and my pension will be reduced to 80% of its current value when it's picked up by the PPF.
Even those who are currently employed and not in immediate danger of redundancy are looking at drawing their pension just to protect it if BA actually go to the wall.
Waiting time for pension packs and CETV estimates is currently 3 months!!
A company/private pension can be drawn without penalty at age 55. NAPS and APS are now deferred pension schemes. yes, they are in deficit but they are no longer linked to final salary. They are essentially a finite cost . That's why they have been closed.
What is interesting is the size of the CETV currently being offered. Well in excess of the actual individual fund 'values'. This suggests to me that the fund owners are trying to rid themselves of liabilities. IE Current staff.
What is a real fear (to me at least) is that if BA cannot access their biggest market very soon, they will not survive and my pension will be reduced to 80% of its current value when it's picked up by the PPF.
Even those who are currently employed and not in immediate danger of redundancy are looking at drawing their pension just to protect it if BA actually go to the wall.
Waiting time for pension packs and CETV estimates is currently 3 months!!
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TURIN
I am no finacial adviser and pensions are a minefield so would suggest that everyone takes individual advice.
However, my own experience is as follows:1) CETV will be large - it is typically around 20 times pension value -
2) I don't believe you can draw down a defined benefit pension (ie final salary) - only a defined contribution (ie money goes into stock market)
3) Transferring out of a DB scheme is not straight forward - you need to get a quote (official CETV) - then you need to get advice which will be paid for. Advice will almost certainly tell you that it's not a good idea to transfer your DB pension out. You can appeal on the grounds that it's what you want to do and it's your pension (and YOUR money) but the Ombudsman thinks people are stupid and also likely to decline your appeal. No financial advisor is likely to tell you it is a good idea to transfer and the govt has massively increased fines for bad advice which means financial advisors can't afford the risk (and can no longer get risk insurance) and a lot have stopped advising on pension transfers.
Personally, I think it's scandalous that you can't transfer a defined benefit pension (or at least it's near impossible). After the TATA pension debacle where so many were advised to transfer out of their DB pension and got ripped off and ended up with little or no pension the Govt has basically made it impossible to do otherwise (ie transfer). BUT, it is your money , your pension so for Govt to make it impossible via regulation to transfer is not on and you should complain to your MP.
BTW - Something else I consider scandalous - if you die (prior to taking your pension) current legislation allows you to pass on your pension pot as part of your estate. This can be a lot of money. However, DB funds will typically only return PREMIUMS paid into the scheme and NOT its value. So, if your CETV is 200K then you may only have paid 30K of premiums and that's all you get back. If 200K was in a defined contribution scheme then you could pass on all of that.
As per my opening comment - the above is just my experience, I am not a financial advisor so you should take independent advice. I do have a DB pension (but I am not retired so it is deferred) so have done a lot of investigation into what I can do with it hence the post above.
I am no finacial adviser and pensions are a minefield so would suggest that everyone takes individual advice.
However, my own experience is as follows:1) CETV will be large - it is typically around 20 times pension value -
2) I don't believe you can draw down a defined benefit pension (ie final salary) - only a defined contribution (ie money goes into stock market)
3) Transferring out of a DB scheme is not straight forward - you need to get a quote (official CETV) - then you need to get advice which will be paid for. Advice will almost certainly tell you that it's not a good idea to transfer your DB pension out. You can appeal on the grounds that it's what you want to do and it's your pension (and YOUR money) but the Ombudsman thinks people are stupid and also likely to decline your appeal. No financial advisor is likely to tell you it is a good idea to transfer and the govt has massively increased fines for bad advice which means financial advisors can't afford the risk (and can no longer get risk insurance) and a lot have stopped advising on pension transfers.
Personally, I think it's scandalous that you can't transfer a defined benefit pension (or at least it's near impossible). After the TATA pension debacle where so many were advised to transfer out of their DB pension and got ripped off and ended up with little or no pension the Govt has basically made it impossible to do otherwise (ie transfer). BUT, it is your money , your pension so for Govt to make it impossible via regulation to transfer is not on and you should complain to your MP.
BTW - Something else I consider scandalous - if you die (prior to taking your pension) current legislation allows you to pass on your pension pot as part of your estate. This can be a lot of money. However, DB funds will typically only return PREMIUMS paid into the scheme and NOT its value. So, if your CETV is 200K then you may only have paid 30K of premiums and that's all you get back. If 200K was in a defined contribution scheme then you could pass on all of that.
As per my opening comment - the above is just my experience, I am not a financial advisor so you should take independent advice. I do have a DB pension (but I am not retired so it is deferred) so have done a lot of investigation into what I can do with it hence the post above.
As a simple legal statement, yes, however companies can alter ( increase ) this this. My company - which has a pension deficit - changed their rule from that to state-pension age and I thouht it likely that BA would have done the same.
I find it interesting in the light of concern over pension affordability that more seniors didn't take VR and early crystallization of pension benefits to mitigate risk. Any idea why not? I get that the company might not have wanted them to go (as might be inferred from its VR offer) but would like to think that more than a few would ask themselves why that should be so.
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Surely its APS that have a large funding not NAPS. NAPS is underfunded having attempted to amalgamate the two funds unsuccessfully to reduce the debt level. As a contributor stated it is of little concern as if it were to fail the government will foot the bill. Assuming there is any monies left?
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Possibly so he/she might live a few extra years in retirement enjoying that massive maxed out pension?
Trouble is, it is never that simple, some can't because they are on the 3rd. marriage, some because they don't have anything else to do and some because they just plain like the lifestyle. Having retired at 60, it was a bit scary, but nothing now would get me back on the Atlantic at 3am!
Trouble is, it is never that simple, some can't because they are on the 3rd. marriage, some because they don't have anything else to do and some because they just plain like the lifestyle. Having retired at 60, it was a bit scary, but nothing now would get me back on the Atlantic at 3am!
Contemplating the hassle I'm hearing about now now associated with operating to some of the destinations - I'm thinking things like reporting at LHR the day prior to departure for pre-departure Covid tests, lockdowns in some downroute hotels, risk of being detained by friendly local police at a government facility if you test positive on arrival I do wonder if some who were on the cusp of taking VR but declined the option are regretting their choice.
I can understand why those with more than a year or so to go are soldiering on and I wish the the best of luck but I think if you've months to go you'd have to be seriously addicted to aviation and/or seriously hard up to continue putting up with "the dream" as it is currently being lived by some on Long Haul.
I can understand why those with more than a year or so to go are soldiering on and I wish the the best of luck but I think if you've months to go you'd have to be seriously addicted to aviation and/or seriously hard up to continue putting up with "the dream" as it is currently being lived by some on Long Haul.