LONDON (AP) — British Airways says it has reached an agreement with pension trustees on a plan to close deficits.

The deal, if approved by regulators, is designed to resolve a key issue in a proposed merger with Spanish airline Iberia.

BA said yesterday its annual contributions to the two pension plans would continue at £330 million ($487 million) per year, plus increases of about three percent a year.

BA says it will make addition contributions if its year-end cash balance is over £1.8 billion, and it has made additional provisions for securing pensions if it becomes insolvent.

The issue was a sticking point in negotiations with Iberia, which can still reject the merger.

BA is losing money, and is locked in a protracted dispute with the cabin crew union over other issues including working practices and travel benefits.