Gatwick is a key airport in our home market and our activities there must operate on a sound financial footing

Rod Eddington, BA chief executive

Cabin crew, engineers and baggage handlers at Gatwick Airport are expected to be among those who lose their jobs - though this has not been confirmed by BA yet.

Turning the corner

In the past year, BA has been hit by a series of setbacks including high fuel prices, the collapse of merger talks with Dutch carrier KLM, increased competition from low-cost airlines in Europe and the grounding of its fleet of Concorde aircraft.

Last year, the company posted a loss of �310m, its first loss since privatisation.

It does however now appear to have turned the corner.

Last month, BA announced a better-than-expected surge in profits, up by 125%, in a sign that the recovery of the much-troubled airline is well underway.

Analysts interpreted the latest figures as a sign that BA's new strategy focused on flying smaller planes with bigger proportions of higher-paying passengers was delivering results.

Blow to Gatwick

Many analysts see Gatwick as the biggest European lossmaker for BA.

The BA announcement marks a shift from earlier attempts to build Gatwick as a transfer hub, which would compete with Heathrow.

There will now be less emphasis on providing services out of Gatwick that feed into longhaul flights, BA said.

It added that the shorthaul business will be refocused to concentrate on serving London and the south east of England.

Rod Eddington, BA chief executive, said: "Gatwick is a key airport in our home market, and our activities there must operate on a sound financial footing."

"Despite the very best efforts of our team there, this has not previously been possible to achieve. "The steps we are announcing today should improve our group profitability and ensure British Airways has a long-term viable future as Gatwick's leading airline."

Union caution

Unions have cautiously welcomed the move.

"We broadly support the strategic direction which BA are taking," George Ryde, national secretary for civil air transport at the Transport and General Workers Union, said.

"These changes will present us with challenges but we are confident that we can discuss the issues with the company and protect our members' futures. Above all, we are confident that there will be no compulsory redundancies."