The massive British Airways pension deficit of £2.1bn will be cut in half if proposals put to the Transport and General Workers Union (TGWU) – the largest at BA with 20,000 members – to pay £800m into the fund is accepted.

BA has made the offer to benefit its 33,500 company pension members and considers the move to be a valuable saving and investment for the firm. The TGWU said more details would be given in due course, including staff reaction to accept proposed changes like raising the retirement age to 65.

BA said that the payment would make its ongoing payments into the pension fund more affordable. “It effectively tackles one of the most fundamental issues we face and constitutes a valuable saving and investment opportunity for us,” said BA chief executive Willie Walsh.

The TGWU also sounded a positive note and said it would back changes that would enable the company to contribute hundreds of millions of pounds to the pension fund. The firm’s scheme has 33,000 active members, 20,000 deferred members and 15,000 pensioners.

The proposal comes on the back of BA having paid £235m into the fund in 2005 and has warned that unless employee benefits were scaled back significantly then minimum payments into the fund would have to rise to £497m, which would not represent the best investment of its available funds.