British Airways was accused of "butchery" yesterday after announcing 5,800 job cuts and further capacity reductions in an attempt to return to profit.
The redundancies come on top of 7,200 job losses announced in the immediate aftermath of 11 September and are aimed at saving the airline £650m a year.
The job cuts, which BA hopes to achieve voluntarily during the next two years, will reduce the workforce by 13,000 or almost a quarter. It has set aside £200m to pay for the redundancies.
Rod Eddington, BA's chief executive, said the job losses were painful but necessary if the airline was to survive the "crisis". But Bill Morris, general secretary of the Transport and General Workers' Union, said: "We expected mild surgery but what we have got is butchery."
The GMB union has said it will ballot its members on industrial action if BA attempts to impose any compulsory redundancies. Sir Ken Jackson, general secretary of the AEEU engineering union, warned BA against cutting costs as "a knee-jerk reaction to satisfy the City".
The financial markets decided, however, that BA had not gone far enough and its shares ended the day 4p lower at 199.75p – a fall of 2 per cent.
The job cuts are part of a sweeping review at BA. It will withdraw from 10 short-haul and long-haul routes and transfer eight others from Gatwick to Heathrow. It is also slashing commissions paid to travel agents and introducing an internet-only booking system for cheap fares on its short-haul European network.
Mr Eddington said it was necessary to transform BA into "a simpler, leaner, more focused airline" if it was to thrive in the face of increased competition from no-frills airlines.
He said there was no question of BA becoming a budget airline or launching one but he added: "We will compete profitably and intelligently alongside them by adopting what they do well – online bookings, high aircraft utilisation and pricing simplicity."
A new pricing structure for BA's short-haul routes will be introduced this summer and will be modelled on the likes of Go, easyJet and Ryanair, with fares starting cheaply and becoming more expensive the nearer to the day of the flight.
Coming after cutbacks announced since 1999, the latest measures represent a body blow to Gatwick. By the summer of next year, BA will have reduced its capacity at Gatwick by 60 per cent, cutting the number of long-haul destinations served by the airport from 41 last year to 15. BA is also simplifying its fleet at Gatwick to two aircraft types – the Boeing 737 for short-haul operations and the Boeing 777 for long-haul routes.
Mr Eddington said the job reductions would save BA £450m a year and a further £100m would be saved by halving travel agents' commission on domestic and European ticket sales. Another £100m of savings will be achieved through better procurement and information management.
About one-third of the job losses will be among head office and support staff. But BA is also getting rid of 400 pilots, 3,400 cabin crew and 1,500 engineers. Of the 13,000 redundancies, 6,600 will be at Heathrow, 3,000 at Gatwick, 1,200 at BA's regional centres and 2,200 overseas.
BA has not yet announced which services it is scrapping altogether. The routes being switched from Gatwick to Heathrow include Mauritius, Buenos Aires, Lagos, Bucharest and Kiev.Reuse content