BA battles the turbulent air ahead of AGM

INVESTORS in British Airways (BA) are psyching themselves up for another dose of doom and gloom ahead of the ailing airline&rsquo;s annual meeting tomorrow, as worries about its pension deficit, record losses, tie-up woes and the worldwide downturn weigh on the company.<br /><br />Chief executive Willie Walsh, who has said the carrier is in a &ldquo;fight for survival&rdquo;, is under fire from workers and unions as he asks staff to take pay cuts to help the company survive.<br /><br />The airline has said that 800 management staff at the company have agreed to work for free for up to four weeks, while a further 6,200 volunteered either to take unpaid leave or switch from full-time to working part-time shifts.<br /><br />But a summer of discontent looms, as 2,000 cabin crew and ground staff rejected cost cutting plans put to them by BA last week, leaving the unions to negotiate new terms.<br /><br />So dire was the situation that BA even called in conciliation service Acas to help reach a deal.<br /><br />Other big worries for investors include BA&rsquo;s pension deficit &ndash; which could hit &pound;3bn, or more than double the company&rsquo;s value, by the end of the year &ndash; and news that the fund manager who runs the pension fund got a pay rise of nearly &pound;200,000 last year will do little to ease tensions among shareholders. <br /><br />Another problem for the company is that BA&rsquo;s potential tie-up with Spanish carrier Iberia is now starting to look less likely under the latter&rsquo;s new chairman Antonio Vazquez, who is understood to have demanded &ldquo;make or break talks&rdquo; over the deal. <br /><br />BA needs to complete a tie-up with Iberia, the talks for which have been stuttering along for a year, to remain competitive against rival airline giant AirFrance KLM. But worries over its pension deficit have hindered a final deal being struck.<br /><br />Shareholders will be looking to Walsh to steer the company through the downturn, solve the pension deficit and avoid strike action.