British Airways to cut jobs
LONDON, Jan 28 (Reuters) -- British Airways Plc, Europe's biggest airline, said on Wednesday it planned to cut £300 million ($550 million) from staff costs over the next two years to secure its future and become a profitable carrier.
Chief Executive Rod Eddington said in a letter to staff that the business plan's aim of achieving an operating profit margin of 10 percent could only be achieved with more job cuts.
"This is the target we must hit if we are to secure our future and become profitable and successful," Eddington said. "Clearly we cannot achieve that target without some further headcount reduction."
BA has already slashed more than 12,000 jobs.
Eddington would not detail the size of new job cuts but said that 30 percent of the savings needed to come from head office and support functions and 15 percent from operational areas.
There would be no compulsory redundancies, he said, confirming the details of a Reuters story published on Monday.
"We have a range of options under the business response scheme including unpaid leave, part-time working, voluntary severance and early retirement," he said. "We also lose jobs through natural turnover and restricted recruitment."
Fierce competition within Europe from the booming no-frills carriers has forced full-service carriers to reduce fares to boost demand, while cut backs in corporate travel budgets have reduced high-margin long-haul revenues from business travellers.
BA had made 701 million pounds in annual savings by the end of last September against a target of 650 million pounds by March 2004 under its "future size and shape" programme unveiled 23 months ago.
Eddington said the latest business plan would run alongside another cost-cutting programme announced last year and designed to save 450 million pounds by the end of March 2005.
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