Business | Aviation
BA launches fresh round of cuts
Part of airline's bid to reduce capital spending as demand for travel falls.
- By Kevin Done, Financial Times
- Published: 23:04 July 4, 2009
London: British Airways is launching a fresh round of capacity reductions and job cuts to staunch mounting losses and to slow the outflow of cash from the business.
It is reducing capital spending and deferring deliveries of new aircraft, including delays of up to two years in its orders for the Airbus A380 superjumbo, which was being purchased as a new flagship for the BA long-haul fleet.
The struggling UK flag carrier confirmed on Friday it was seeking to cut 3,700 jobs by March 2010 in addition to the 2,500 jobs removed in the 10 months to the end of March 2009.
It was further cutting capital spending this year from £725 million (Dh4.3 billion) to £580 million (Dh3.5 billion).
BA is struggling to cope with a sharp fall in revenues because of shrinking demand for air travel, in particular from its most lucrative premium business passengers.
The decline has been exacerbated by a steep drop in yields or average fares, as airlines are forced to discount fares heavily to try to fill empty seats.
It is locked in a tense stand-off with a large part of its workforce, as it seeks to cut costs and increase productivity in the face of a second consecutive year of heavy losses.
The airline said on Friday its premium traffic volumes in June, measured by revenue passenger kilometres, had fallen by 14.9 per cent year on year.
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