Cost cutting is vital for survival, says BA chief

The boss of British Airways today spelled out his determination to achieve a "fundamental" change to employment costs as he warned that the airline was in the "eye of the storm", battling against the recession.



Chief executive Willie Walsh told the company's annual meeting in London that he wanted to achieve 3,700 job losses by next March on top of 2,500 which have gone since last summer.



"There is no point trying to skirt around the fact that we need a fundamental and structural change to our employee cost base.



"These changes are essential to our short-term survival and, more importantly, to our long-term viability."



Mr Walsh said talks, which are continuing with trade unions to achieve the job losses and agree a pay freeze, were delivering some "very positive" results but he warned unions that he was not exaggerating the difficulties BA faces.



"We have pulled no punches. It is essential for our short-term survival and long-term viability that we secure permanent change in our employee costs."



BA chairman Martin Broughton said the aviation industry was facing the biggest crisis it had ever known and he warned that the market for premium air travel may never fully recover.



He told shareholders that BA made an operating loss of more £300 million in the final quarter of the last financial year, the worst quarterly result in its history.



"This is no ordinary aviation downturn. This is no cyclical swing that will automatically turn up again."



Mr Broughton also warned that the deficit in BA's pension funds is likely to have worsened by more than £1 billion in the last year.



The company has paid £1.8 billion into its two pension schemes in the past three years - more than its profits.



"The deficits remain huge and, in the current climate, the company will not be able to afford to increase its own contribution."



Despite BA's financial problems, Mr Broughton said the company remained opposed to state aid for airlines and took a swipe at Virgin boss Richard Branson, who had raised the issue recently.



"We should not be too critical of Richard Branson. After all, he is rather worried about his own airline and he knows quite a lot about subsidies because he's been welcoming them into his train operations for years."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there