BA hits delay in pension hole talks

Willie Walsh, the chief executive of British Airways, has conceded that talks with unions over the company's plans to plug its £2.1bn pension deficit could continue into December.

Mr Walsh said he was confident the company would resolve the issue by the end of the year, enabling the airline to focus on the overhaul of its fleet of planes. The company had previously indicated that it expected to wrap up talks with unions and its pension fund trustees this month.

"I am not sure whether it will be the end of this month. The timescale of mid-November was one that the trustees indicated and we have said we are happy to work to the timescale," he said.

Unions oppose BA's plans to address its pension deficit, which include increasing the retirement age to 65 and capping benefits.

BA is to invest £100m over the next 18 months in revamping its business class seats to widen the size of the beds and increase the sense of privacy for business customers. It is also reviewing plans to reinvigorate its first-class cabins.

Mr Walsh said the market for business and premium leisure seating remains strong despite the recent terrorism-related scares and limitations on hand luggage.

Last night Mr Walsh called on the Government to speed up the expansion of Heathrow airport. He urged ministers to set out a clear timetable for the building of a short third runway and the introduction of mixed-mode operations.