British Airways says that it offered Gate Gourmet, the catering firm at the centre of the Heathrow dispute, a new more generous contract in mid-July.
Heathrow is returning to normal
It said the increased offer would have dealt with the financial problems of the company and have given them long-term stability until 2010.
The move follows criticism of BA by the union representing 670 sacked workers.
Talks to settle the dispute broke down after Gate Gourmet ruled out re-employing all of the sacked staff.
That was a key demand of negotiators for the Transport and General Workers Union, which also represents BA baggage handlers who went on unofficial sympathy strike last week.
The company has warned it could collapse if it cannot solve its problems at London's Heathrow airport.
The head of the T&G, Tony Woodley, said it was Gate Gourmet's insistence that they would only re-employ some of the sacked staff which caused the breakdown, while the firm blamed the ending of the talks on preconditions imposed by the union.
Mr Woodley added that "The T&G remains in talks with British Airways but it is our belief that BA cannot do a Pontius Pilate on this issue."
However, Gate Gourmet said the strikes were illegal.
"The company will not allow itself to be continually put at risk and held to ransom by this type of illegal action," Gate Gourmet said in a statement.
British Airways said it was "disappointed" at the development.
"We have been encouraging both sides to reach an agreement and we are urging them to continue talking," a spokesman said.
Both sides had earlier stressed they hoped to reach an agreement.
But Gate Gourmet warned that without a deal, "the most likely outcome will be that the business will be forced into administration."
The company sacked 670 staff from its airline meals service last Wednesday in a dispute over restructuring.
The company lost £25m at its Heathrow operation last year, and maintains that changes in working practices are needed.
A spokeswoman said it needed to save £14m on labour at Heathrow this year.
The sackings led to a sympathy strike by BA baggage handlers which disrupted many BA flights from Thursday to Sunday, bringing chaos to 70,000 Heathrow passengers.
The TGWU says that it is willing to talk to Gate Gourmet about the "future size and shape" of the company, but only if all the sacked staff are first reinstated.
The spokesman stressed that the unions had been discussing Gate Gourmet's strategic options for six to eight months before last week's events.
British Airways says that 155 people remain stranded by the strike.
A BA spokeswoman was unable to say how many of these were at Heathrow and how many are in other destinations around the world. All now have confirmed bookings on flights scheduled to depart by Thursday, BA says.
The cost of the strikes to BA in loss of revenues, refunds and the expense of accommodating passengers in hotels is estimated at up to £40m by airline industry analysts.