BA plans to raise the retirement age for staff

Under the proposals, the compulsory retirement age for pilots and cabin crew will rise initially to 60 from 55.

However, within five years, the retirement age for BA cabin crew will rise to 65, the airline told unions.

Willie Walsh, BA chief executive, said the change "will provide competitive, affordable pensions for the future".

We still don't really know if today's measures will be the right ones for our members and for the scheme Brendan Gold, T&G union

The decision to raise the retirement age for staff will cut the company's pension deficit by an estimated �450m, the airline said.

In addition, the airline promised to pay an extra �500m into the pension scheme once the changes had come into force. It pledged that the company's lucrative final salary scheme would stay in place.

But the �500m payment into the pension fund is conditional on staff accepting later retirement.

BA staff are also being asked to accept a cap of 2.5% on annual increases to their pension income in retirement.

Union caution

Unions reacted cautiously to BA's plans.

"It was no secret that BA's pension funds were in deficit, but we still don't really know if today's measures will be the right ones for our members and for the scheme," Brendan Gold, T&G union national secretary, said.

Mr Gold added that BA should not put conditions on the proposed �500m pension top-up as it had already made savings of �800m by slashing 13,000 jobs.