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War forces BA to cut flights
LONDON, England (CNN) -- British Airways said on Wednesday it would speed up job cuts and cut flights as war in Iraq worsens the crisis in the industry. The International Air Transport Association has said the war could add $10 billion to world airline losses this year. It also predicted international passenger numbers would drop 15 to 20 percent during the year, depending on the region. Airlines have already reported accumulated losses of $30 billion since the Sept. 11, 2001 attacks in the United States reduced air travel. Many companies have slashed their travel budgets to preserve cash during an uncertain economic climate and tourists are canceling or postponing air travel altogether. "There are clearly tough times ahead and experience has shown us that conserving cash is critical at these times,'' BA Chief Executive Rod Eddington said in a statement. The main routes to be cut by BA will be to the United States, while the timing of the 13,000 job cuts, announced about two years ago, will be brought forward by six months. BA, Europe's biggest airline, which last week announced it was canceling flights to and from Tel Aviv, Israel, and Kuwait, said it was reducing capacity by 4 percent. It plans to cut one out of seven daily flights from London Heathrow to New York's John F. Kennedy until the end of May; and one daily flight to Chicago will be suspended until April 8. BA is not the only airline cutting routes because of the war. Air France, Austrian Airlines and Cathay Pacific are among a large group which has been affected. (Full Story) Deutsche Lufthansa, Germany's dominant carrier, said on Tuesday it too would stop some flights due to the Iraq war. It has already grounded 48 aircraft. Italian carrier Alitalia and Dutch airline KLM have also suspended routes to the Middle East. The carrier, which has slashed thousands of jobs and cut capacity by about a fifth in the past two years, relies heavily on its transatlantic routes for its high-margin revenues. It has already reduced capacity by 12 percent on transatlantic routes. The airline said it will accelerate plans to cut 13,000 jobs by the end of September this year, rather than March 2004 as was previously planned. Further cost cutting measures have also been announced. The airline said this month it would slash costs by an extra £450 million a year by March 2005 on top of an existing cost-cutting drive. "We are still assessing the impact on passenger demand but the industry has been feeling the effects of war for some weeks now," Eddington said. "However, we are in good shape with more than £2 billion in cash and committed facilities available and we will survive this conflict."
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