Page last updated at 18:13 GMT, Monday, 13 July 2009 19:13 UK

BA pilots to accept 2.6% pay cut

BA planes
BA has been hit by higher fuel costs

British Airways pilots have voted overwhelmingly to accept a 2.6% pay cut, the British Airline Pilots' Association (Balpa) has announced.

The cut is designed to save the troubled airline up to £26m a year in running costs. In return, the pilots have the chance to receive BA shares.

BA has been striving to cut costs in the recession. In May, it reported a record annual loss of £401m.

It has asked thousands of employees to take pay cuts or work for nothing.

'Necessary step'

More than 90% of pilots accepted the deal, which also involves a reduction of 20% in certain allowances.

Pilots currently earn between £24,000 and £110,00 a year, with the average salary about £80,000.

We are satisfied that this step is necessary to help BA recover its position as one of the world's most successful airlines
Jim McAuslan

Collectively, they will receive shares in the airline in three years' time, worth £13m, as part of the deal.

"We have pressure-tested the company's trading position and cost base and are satisfied that this step is necessary to help BA recover its position as one of the world's most successful airlines," said Jim McAuslan, general secretary of Balpa.

"Our members have backed that judgment and are leading the way in contributing to the turnaround plan."

Job cuts

It is not just pilots who are being asked to make sacrifices.

The company has been in talks for several weeks with unions representing cabin crew and ground staff over costs savings plans, including 2,000 job cuts among cabin crew and 1,000 job cuts among administrative staff.

So far, these talks remain unresolved.

Last week, a mass meeting of more than 2,000 BA cabin crew workers rejected the airline's plans to cut jobs and freeze pay.

Instead, they backed a union plan, which officials have said could save between £100m and £130m.

The union Unite said it was prepared to consider a two-year freeze on pay.

Unpaid leave

BA has admitted it is in a "fight for survival" because of rising costs and a fall in demand caused by the global economic downturn.

Last month, it asked all its staff in the UK to volunteer to take up to one month's unpaid leave or work unpaid for that time.

BA chief Willie Walsh has already agreed to work for nothing in July, forgoing his month's salary of £61,000.

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