British Airways is set to regain its coveted investment-grade rating after being downgraded to junk more than three years ago, benefiting from a deal with labour union representatives over its pension deficit.

Standard & Poor's, which is one of two rating agencies alongside Moody's Investors Service that rate the UK airline, reacted positively to BA's announcement this week that it has secured union backing for its proposed plan to tackle its pension scheme deficit. Union members are yet to vote on the plan but representatives have agreed to endorse it.