British Airways PLC (BAY.LN), an airline company, announced Thursday that the trustees of its Airways Pension Scheme or APS, have entered into an insurance transaction with Rothesay Life, covering 20% of pensioner liabilities worth GBP1.3 billion.

MAIN FACTS:

-The APS scheme has committed to pay Rothesay Life pre-determined cashflows.

-In exchange, Rothesay Life will make payments to APS matching 20% of the actual pension payments as they arise.

-The insurance transaction provides protection for longevity risk and provides a direct match for the pension cashflows in all inflation and interest rate scenarios.

-The transaction does not change contributions from British Airways and is consistent with the long-term aims of the scheme to reduce the reliance on the employer over time.

-Shares closed Thursday at 186.50 pence.

-By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; zechariah.hemans@dowjones.com