BBA cuts 15 per cent of global workforce

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The Independent Online

The slump in the aviation industry took further casualties yesterday when BBA Group slashed 15 per cent of its workforce following a 20 per cent reduction in commercial aviation business this year.

Separately, Senior, a British engineering group, said it would to take a £3m charge this year as a result of cutting 420 jobs due to worsening conditions in the aviation and aerospace sectors.

BBA, which provides support services to airlines and manufactures hydraulic equipment, is cutting 900 jobs, mostly in the United States. The company said that while its corporate aviation division has held up, the steep fall-off in customers using commercial airlines made it necessary to shrink the business. The company said 100 jobs would go in the UK from the aviation side of the business.

Roy McGlone, the chief executive of BBA, said: "2001 has not been the easiest year for anyone I know and that applies to us too. We are cutting costs in aviation by about 15 per cent to match the 20 per cent reduction in our business."

Mr McGlone added that the outlook for next year is also troubled, predicting commercial aviation would be 15 to 20 per cent down in the first half before picking up. The job losses, which have mainly been implemented, will cost BBA £7m. The closure of US airspace after 11 September is expected to knock another £4m off operating profit this year. BBA shares fell 2p to 267p.

The company expects year-end operating profits at its aviation services unit, which makes up 60 per cent of the turnover, to be £85-90m, around £10m lower than previous analysts' forecasts. BBA's materials technology unit, which makes up the 40 per cent of turnover, was largely unaffected by the events of September 11. The company said its cost-cutting programme at the materials technology arm was on track to create £20m in savings.

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