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British Airways to cut another 5,800 jobs
British Airways said on Wednesday it would cut a further 5,800 jobs to take total layoffs to almost a quarter of its workforce in the past five months, as part of a new `size and shape` plan to return to profitability.
British Airways said on Wednesday it would cut a further 5,800 jobs to take total layoffs to almost a quarter of its workforce in the past five months, as part of a new "size and shape" plan to return to profitability.
Coming on top of 7,200 job cuts already announced, the two-year plan will cost Europe's biggest airline 200 million pounds ($286 million) in restructuring charges but result in 650 million pounds in annual savings by March 2004.
The heavily indebted airline is hurtling towards its biggest financial loss since it was privatised 15 years ago, as it struggles to cope with both a slump in demand for air travel since the September 11 US plane attacks and with increased competition in Europe from discount carriers.
"The conclusions of the review... signal a significant change to the size of British Airways as it takes further steps to address its cost base and sets the company on course to achieve a 10 per cent operating margin," chief executive Rod Eddington said in a statement in London. Biting at its short-haul markets in Europe are the no-frills carriers such as Ryanair Holdings Plc and easyJet Plc, which have been wooing price-sensitive business and corporate customers from the full-service carriers.
However, BA sold off its own budget airline Go last year and ruled out on Wednesday setting up another low-cost carrier.
Instead, it said it would restructure its European short-haul operations to compete with the budget carriers by adopting Internet booking, simplifying ticket pricing and cutting travel agency commissions and by making more efficient use of its aircraft. "We must transform British Airways into a simpler, leaner, more focused airline, so we can thrive and prosper in an increasingly competitive market," Eddington said.
He also said BA would sell five of its long-haul Boeing aircraft, transfer 16 smaller jets based at London's Gatwick airport to Manchester airport, with capacity at Gatwick slashed by 52 per cent by summer 2003 versus summer 2001.
Eight routes at Gatwick will be transferred to London's Heathrow airport, the world's busiest international airport and the carrier's fleet will be reduced by 49 aircraft to a 305 aircraft by summer 2003, BA said. Bureau Report
The heavily indebted airline is hurtling towards its biggest financial loss since it was privatised 15 years ago, as it struggles to cope with both a slump in demand for air travel since the September 11 US plane attacks and with increased competition in Europe from discount carriers.
"The conclusions of the review... signal a significant change to the size of British Airways as it takes further steps to address its cost base and sets the company on course to achieve a 10 per cent operating margin," chief executive Rod Eddington said in a statement in London. Biting at its short-haul markets in Europe are the no-frills carriers such as Ryanair Holdings Plc and easyJet Plc, which have been wooing price-sensitive business and corporate customers from the full-service carriers.
However, BA sold off its own budget airline Go last year and ruled out on Wednesday setting up another low-cost carrier.
Instead, it said it would restructure its European short-haul operations to compete with the budget carriers by adopting Internet booking, simplifying ticket pricing and cutting travel agency commissions and by making more efficient use of its aircraft. "We must transform British Airways into a simpler, leaner, more focused airline, so we can thrive and prosper in an increasingly competitive market," Eddington said.
He also said BA would sell five of its long-haul Boeing aircraft, transfer 16 smaller jets based at London's Gatwick airport to Manchester airport, with capacity at Gatwick slashed by 52 per cent by summer 2003 versus summer 2001.
Eight routes at Gatwick will be transferred to London's Heathrow airport, the world's busiest international airport and the carrier's fleet will be reduced by 49 aircraft to a 305 aircraft by summer 2003, BA said. Bureau Report