Ba To Cut 1bn Costs

Britain's flag-carrier airline British Airways Plc said on Wednesday it aimed to slash £1 billion ($1.56 billion) from its annual costs bill in what it called a Step Change efficiency drive.

BA said it would be seeking 5,000 voluntary redundancies or early retirements over the next 18 months but sugared the pill by saying it will also recruit a similar number of staff with different skills over the next three years.

I do not expect wholesale job losses, said chief executive Robert Ayling in a statement. Jobs will also be created, and jobs secured. We will grow and we will improve. I am committed to a strategy of investment and improved profitability.

Earlier this year, Ayling had announced the intention to cut costs to offset continuing falls in average fare levels and the rising costs of handling more traffic.

BA said it would consider selling or sub-contracting some of its services if they should be done better or more cheaply that way.

It also said it would unveil new product, brand and customer service plans over the next few months and would confirm new plans for aircraft investment worth hundreds of millions of pounds, and for new sales and customer service technology.