BA jobs axe bombshell

British Airways today axed 5,800 jobs in a desperate attempt to cope with the global slump in air travel.

It takes job losses at the struggling airline, which is losing £2 million a day, to 13,000 since September. The flag carrier will also slash routes out of Gatwick, with four long-haul and four short-haul routes transferred to Heathrow.

Eventually a further 10 routes will go altogether as part of a major reduction in capacity. At Gatwick the cuts amount to 60%.

The cuts ordered today hit management levels hard, with one in three staff at head office to go. BA has now shed almost one in four staff since September, with the workforce shrinking from the pre-September level of 56,700 to 43,700 by March 2004.

It is part of a "significant restructuring" to achieve savings of £650 million a year and is aimed at allowing the airline to compete with the budget operators which have flourished while BA has struggled.

Chief executive Rod Eddington said today BA must be transformed into a "simpler, leaner, more focused airline".

He said the introduction of cheaper internet fares and lower fares on European routes did not mean that BA was becoming a low-cost airline, saying: "We will not become a no-frills airline nor will we launch one."

Union leaders attacked the job cuts with Bill Morris, general secretary of the Transport and General Workers' Union, saying they are "much worse" than expected. "We expected mild surgery but what we have got is butchery," he said.

Roger Lyons, leader of the engineering union Amicus, said the job cuts over the next two years were a "devastating blow" to staff.

The company said it aims to make the job cuts on a voluntary basis and will work with trade unions to achieve the target.

The eventual total of 13,000 job cuts will include 400 pilots, 3,400 cabin crew, 800 customer services staff at Heathrow, 550 services staff at Gatwick, 1,500 engineers, 2,600 world sales staff, 800 cargo employees and 2,950 others, mainly among head office and support staff.

About 6,600 of the jobs will be cut from Heathrow, 3,000 from Gatwick, 1,200 from regional bases in the UK, and 2,200 will go overseas. City analysts believe as many as 20 per cent of BA's 51,000 staff could eventually be cut.

The restructuring will see longhaul destinations reduced from 41 to 15 through the suspension of unprofitable routes and moving others to Heathrow. BA's UK-based fleet of aircraft will be cut by 49 to 305 by the summer of 2003.

Today's announcement is part of the company's Future Size and Shape review announced in the wake of the slump in passengers numbers after the 11 September attacks. It will save BA £650 million a year by March 2004. The job cuts form the largest part of the cost-cutting measures, with £450 million in savings made from staff and property reductions.

BA wants more passengers to buy cheaper tickets on-line, saving up to £100 million in commission paid to travel agents. Another £100 million will be saved on IT-led efficiencies and a reduction in suppliers.

BA announced worst-ever quarterly losses of £187 million for the three months until the end of December, blaming its predicament on the slump in transatlantic and business traffic. Numbers of business passengers - the market that BA relies on for almost all its profits - slumped by 27 per cent during October to December on the previous year.

In another blow last month the airline was forced to pull back from allying with American Airlines because the conditions set down by the US Department of Transportation were deemed too harsh.

How the cutbacks will work
Comment: Hard choices for BA
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