BA still "Too Expensive to Run"5000 jobs to go ???
BA staff fear 5,000 job cuts
by Juliette Jowit, transport editor
Sunday December 14, 2003
The Observer
Thousands of jobs are to be axed by British Airways amid growing fears about the company's finances.
The airline, which has debts of £4.8bn, is
to introduce the measures in the face of rising costs and falling income from ticket sales.
The company, which is struggling to cope with a world economic downturn and competition from low-cost airlines, will publish its plan in January, it was revealed last night.
The programme will include tough cost-cutting and thousands of job cuts. Last night a BA spokesman refused to comment on speculation that the job losses could be as high as 5,000.
However, another source said the 5,000 figure was credible. 'It [the figure] might be higher, it might be lower ... It's not an outlandish estimate,' he said.
Two years ago BA announced a drastic cost-cutting programme, including sacking 13,000 workers. Since then, revenue has dropped even further by £1.9bn.
To add to their problems, BA last month revealed a £1bn shortfall in its pension scheme, which will cost another £133m a year to put right.
And last night a senior company official admitted income has still not picked up as expected this year. 'It's looking a bit better now but I think everyone in the airline is so cautious because we have been there before,' he said.
Rod Eddington, chief executive, revealed that the early action plan would be published before the usual date in March in a letter to BA's 46,000 staff. He said that the airline was still suffering the impact of terrorism and war in Iraq, an economic downturn and competition from low-cost carriers - forcing BA to slash ticket prices to fill its planes.
Results for the first six months of the year, showing profits dropped from £310m last year to £60m, were 'disappointing', he said.
'In short our airline - despite everyone's best efforts in recent years - is still too expensive to run, particularly in these economic conditions.