BA In Last-Ditch Talks With Gate Gourmet

BA In Last-Ditch Talks With Gate Gourmet: "British Airways faced a deadline set by caterer Gate Gourmet to sign a more generous contract on Tuesday or risk its supplier of 80,000 flight meals a day putting its UK operations into bankruptcy administration.

One source close to the talks said BA had offered a further improvement on terms overnight in a bid to reach a deal after months of talks.

A BA spokeswoman declined to comment on the new terms but said, "We are more optimistic about finding a solution with Gate Gourmet."

Gate Gourmet, the world's second-largest airline caterer, is calling for BA to sign an improvement to its current contract with the caterer, which lasts until 2008, by 5 p.m. (1600 GMT) on Tuesday or face the risk of Gate Gourmet's UK operations going into administration.

One source familiar with the situation said the deadline could be extended if significant progress was made in Tuesday's talks, and it was still unclear what the outcome would be.

"The extent to which we feel a significant move forward towards a solution, we'll be able to extend the deadline," the source said. "I really think it could go either way."

BA had offered Gate Gourmet improved terms as well as a contract extension of two years to 2010 last month, but no deal has been signed.

BA, one of the world's most profitable carriers, cannot turn to another caterer for an immediate solution if Gate Gourmet falters, as no alternative supplier has large enough operations at Heathrow to fulfil its needs."