STRIKE action has been threatened by the union representing cargo staff employed by John Menzies at Heathrow Airport, raising the prospect of disruption to the Edinburgh-based company's international freight activities out of London.

Unite said it is preparing to ballot its members over a two-year pay freeze imposed by Menzies Aviation on its staff at the UK's busiest airport for 2012 and 2013.

The move comes after talks aimed resolving the dispute at Acas broke down without agreement earlier this week.

Menzies said the pay freeze is needed to help the operation, which has been loss-making since 2007, return to profitability.

A spokesman for Unite, which represents 294 cargo staff at Heathrow, said a strike could still be averted. He said: "If Menzies decides to return to the negotiating table, and talk to us about recognising the cargo workers' contribution to the success of their business, a strike can be avoided.

"If it continues to talk about two years of a pay freeze, then there is not going to a resolution without a strike ballot."

Last year saw Menzies close several loss-making cargo sites, including Glasgow, Manchester, Birmingham and East Midlands, as part of a strategy to revamp its aviation business. It insisted the future of the Heathrow operation was not in doubt.

Company secretary John Geddes said: "We took action last summer to close a number of cargo operations which were loss-making, one included Glasgow. We supported our Heathrow operation and want to continue to support that, but we can't continue to sustain losses at the rate they are. We have asked Unite to work with us and look at a pay freeze. We are disappointed they have chosen to take the action that they have, but we are committed to still negotiating with them and trying to find a way we can continue to support the operation, support our employees and our customers."