Deadline for BA cost-cutting talks

A deadlocked row over job cuts and pay at British Airways could be resolved through arbitration

Crucial talks aimed at reaching agreement on cost cutting at British Airways, including thousands of job losses, are set to come to a head with prospects for a deal looking slim.

The airline has set a deadline of Tuesday for approving cost savings, including around 3,500 job cuts.

Pay cuts were agreed with leaders of BA pilots earlier this month, but talks have continued for the past few weeks with unions representing other groups, including cabin crew, baggage handlers and check-in staff.

It is believed there are still huge differences between the company's plea for savings to help it survive and the unions' willingness to agree all the cost savings, including changes to terms and conditions.

If the talks break down without agreement on Tuesday, any dispute could lead to a ballot for industrial action which would threaten disruption during the busy summer period.

Union leaders were angered last week when BA announced that almost 7,000 staff had applied for voluntary pay cuts, including 800 who said they will work unpaid for up to a month.

Of the 40,000-strong workforce, 6,940 employees had volunteered for unpaid leave, part-time working or unpaid work by June 24, which the company said will save up to £10 million.

Chief executive Willie Walsh, who has already announced that he will work unpaid for the month of July, said: "This is a fantastic first response. I want to thank everyone who has volunteered to help us pull through this difficult period."

Unions accused the airline's managers of bullying staff into signing up, a charge denied by BA. Officials said staff were pressured by email to accept one of the options or face a meeting with a British Airways manager.

BA made losses of £401 million last year and is reportedly losing up to £3 million a day.