Pilots offered shares for pay cuts

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The pilots' union Balpa is recommending the pay and productivity package aimed at saving the firm millions of pounds.

Under the deal, pilots will see their pay cut by 2.61% - worth around £2,000 - and will take a 20% cut in flying time allowances.

Around 78 jobs will also be lost from the 3,200 pilots at the airline, which is looking to make huge savings to stem losses. BA has asked its staff to consider working for free for part of the time in the coming months or take unpaid leave as part of what chief executive Willie Walsh has called a "fight for survival".

Balpa said it had reached a draft pay and productivity package with BA which would see pilots deliver a permanent annual saving programme of £26 million from October 2009.

"The pay and productivity package will help BA get through the current economic downturn whilst, for the first time, giving pilots the mechanism to take a real share in the wealth they will help to create," said a spokesman.

The pay cut will generate £16 million of annual savings, while an increase in annual duty hours, the delivery of shorter turnaround times on short haul flights and reductions to the crew arrangements on certain long haul routes will lead to £10 million of annual savings, said the union.

Balpa said that in return, pilots will benefit from a groundbreaking long term incentive scheme. In June 2011 they will be eligible to receive BA shares worth £13 million if certain company targets are achieved, although pilots will have to hold these for three years, to June 2014, when they will be free to sell them.

Balpa general secretary Jim McAuslan said: "This is a unique agreement. We have always said that as a union we would share the pain if our members shared in the gain.

"We have been doing some intensive research and polling over the last two months. Our research indicates that BA is facing a real business challenge and this is not the case of the employer crying wolf."