The strikes could have cost BA �10m a day

Unions representing baggage handlers and check-in staff at UK airports agreed a pay deal with managers to head off Friday's action.

The news came after they talked into the night in an effort to avoid the 24-hour walkout by thousands of workers.

BA said it was relieved holidaymakers would not be affected and has started taking bookings again.

The airline has agreed an 8.5% pay increase over three years as well as �1,000 in three lump sum payments to September 2006.

The deal was agreed in the early hours of Saturday after four days of tough negotiations between the company and union officials.

Leaders of the Transport and General Workers Union (TGWU) and the GMB will now back the deal in fresh ballots of BA workers.

But union officials representing BA's cabin crew were not happy with the proposed deal and further negotiations will take place with those cabin crew who have particular concerns.

Absence agreement

Unions have also accepted a new sickness absence policy, to be introduced immediately.

The airline hopes to reduce the present level of sickness absence from an average of 17 days per worker, every year, to 10 days, within 12 months.

BA Director of Operations Mike Street said: "The agreed policy of absence is tough on those persistent absentees while remaining compassionate towards the genuinely sick."

The absence policy could save BA �30m a year, he added.

TGWU chief negotiator Brendan Gold said: "The union is pleased we have a deal on pay which recognises the contribution of our members to BA's continued recovery.

"We are also pleased that the general public can now be assured of freedom to travel over the bank holiday period."

Sting in the tail

BBC labour correspondent Stephen Cape told BBC Radio 4's Today programme that the deal was a "win, win" situation for BA.

Mr Cape, who estimates that the scheme will cover around 47,000 BA staff, described the new policy on absenteeism as the "sting in the tail" of the new settlement.

He said: "They have brought in this tough policy to be kind to people who are genuinely ill and targets those who malinger.

"Seventeen days on average are taken off by BA staff every year against a national average of about seven and it costs BA an absolute fortune.

"They believe the deal will be self-financing."

BA had earlier been forced to stop taking bookings for the Bank Holiday weekend, because of the threatened disruption.