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BA plans more job cuts?
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February 1, 2000: 5:28 a.m. ET
Britain's largest airline aims to cut costs by another 12.5%; report of job cuts
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LONDON (CNNfn) - British Airways will ax 6,500 staff over the next three years in a bid to return the U.K.'s largest airline to profit, according to a report published Tuesday.
The company is expected to lose between 200 million and 260 million pounds ($323 million to $421 million) in the year to Mar. 31, its first loss since privatization in 1987. The carrier has fallen prey to global overcapacity in the industry, as too many aircraft chase too few passengers, above all high-value business travelers.
The planned job cuts represent around 10 percent of the total workforce of Europe's second-largest airline, reported the Financial Times, and are expected to include middle managers, cabin crew and customer service staff. BA declined to comment on the report, but said "there was no secret that the number of people working for the airline will shrink". It had previously said there would be no compulsory lay-offs.
The airline has already announced plans to cut its seat capacity by 12 to 15 percent by 2003 and switch smaller aircraft onto routes where they can focus on capturing more business-class passengers.
BA announced plans Monday to introduce a fourth cabin on its longhaul aircraft between coach and business class to attract more full-fare paying passengers, and slow down the selling of cut-price tickets to sell unfilled seats.
"BA has taken a very sensible approach [but the share price] indicates that the City is not yet convinced by the strategy," said Ian Wilde, an airline analyst at SG Securities in London.
British Airways (BAY) shares fell 1 penny to 327 pence in early trade Tuesday, a little above their 52-week low. The shares have slumped by more than a third since last May.
Wilde added that BA has suffered alongside Europe's other major airlines such as Lufthansa (FLHO) and Air France, which have seen profits plummet because of overcapacity and higher oil prices.
"BA is not a great deal different from any other airline in Europe [and] there is not much an individual airline can do," said Wilde.
BA said in November it had already cut costs by 1 billion pounds in a three-year efficiency drive, and aimed to double the savings by 2002. That would mean the company would have lowered its cost base by 25 percent since 1997.
BA has suffered from the lingering effects of a strike by cabin crew two years ago. That dispute was triggered by a previous round of job cuts and attempts to introduce more flexible working practices. 
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