Air travel slump sees TWR and Iberia axe thousands of jobs

Thousands more jobs were shed in the aerospace industry yesterday as airlines sought to cut costs in the wake of the downturn in air travel caused by the terrorist attacks on America.

The West Midlands-based TWR Aeronautical Systems, formerly known as Lucas Aerospace, announced 1,100 job losses while Iberia, the Spanish flag-carrier, indicated that 2,500 to 3,000 jobs could be axed as it reduces capacity.

Iberia also warned that it was postponing delivery of 15 Airbus medium-range aircraft due next year in a move that could have knock-on effects for jobs among the Airbus partners.

Meanwhile, the small UK carrier GB Airways said it was keen to take over more short-haul European routes currently operated by British Airways as BA increasingly concentrates on the long-haul, business class market.

The TRW job cuts will reduce the company's workforce from 6,900 to 5,800 and will result in 670 redundancies in the UK. The company has six sites in the West Midlands and offices in Hemel Hempstead, Huyton on Merseyside and Belfast.

Ken McIver, chief executive of the company, said there had been a marked decrease in demand for aerospace components since 11 September. "The coming months will be a very difficult time for our company as we make the necessary adjustments to remain competitive in a rapidly changing environment."

Iberia said it planned to reduce capacity by 11 per cent as part of a cost-cutting drive designed to save 18bn pesetas ($100m) by 2003. The airline said its 29,000-strong workforce would be reduced in line with the capacity cuts but declined to give an exact figure.

The Gatwick-based GB Airways is a franchise operator on behalf of BA, flying to 20 destinations in southern Europe and North Africa with a fleet of 10 aircraft, all painted in the BA livery. The airline has just added the Gatwick-Montpellier route to its network after BA dropped the service as part of the cutback in operations announced a fortnight ago.

But John Patterson, GB Airways' managing director, said it was hopeful of extending its franchise operations to routes currently served by BA such as Cyprus, Corsica, Sardinia and Crete. "We are keen to expand and BA is keen for us to take on some of the routes they can't service because it keeps the BA brand in the market."

Mr Patterson estimated that the US terror attacks had resulted in a fall in bookings of around 20 per cent but he said profits in the year to April, 2002 would still be better than last year's £6m. In an attempt to compensate for the decline in traffic GB Airways has just launched a series of cut-price fares and expanding its programme of "winter sun" flights to destinations such as the Canary Islands.

Elsewhere plans continued to bail out stricken airlines forced to the brink of collapse by the aviation crisis. Crossair, Europe's largest regional carrier, said it favoured a gradual takeover of Swissair's airline operations, assuming control of short-haul flights in two weeks and long-haul operations in March, following the Sfr1.35bn (£573m) rescue deal financed by UBS and Credit Suisse.

Separately, KLM said it was in alliance talks with the Hungarian national carrier Malev. Hungary has been trying to find a partner for Malev, eastern Europe's number three airline, since its offer to sell 47 per cent of the unprofitable carrier failed to attract a bid last year.