British Airways to slash costs

British Airways to slash costs

LONDON -- British Airways, Europe's largest airline, today unveiled plans to slash costs by a further ?300 million ($550 million) over the next two years.

The airline said it aims to cut employee costs at its head office and support functions by 30 percent and by 15 percent in "operational areas" through staff reductions, wage restraints and improved working practices to achieve its goal of an operating margin of at least 10 percent.

Most of the layoffs among its 43,200 strong payroll likely will be among managers and administrative staff, but the airline did not say many jobs would be lost or how the cuts would be split between its passenger and cargo operations.

"The last two years have been about survival -- now we want to be in a position to prosper," said BA chief executive Rod Eddington. The cost base " still remains too high," he said, but ruled out layoffs.

The carrier has shed 13,000 jobs, or 23 percent of its payroll, over the past two years, achieving annualized savings of $1.28 billion by September 2003, ahead of its target of $1.19 billion by March 2004.