The UK's biggest travel operator, Airtours, has cut 1,600 jobs as part of its efforts to reduce costs across the group in the wake of the 11 September terrorist attacks.

The cuts come despite a 57% rise in annual operating profits, before exceptional items, for the year to 30 September, although pre-tax profits fell sharply during the period.

Chief executive Tim Byrne said the job losses were unavoidable and blamed the terrorist attacks in the US.

"It was absolutely directly to do with 11 September. We felt it was a prudent and necessary measure," he said.

Since 11 September, Airtours has paid out �11.4m to repatriate stranded customers.

The news came on the day leading UK aerospace and defence firm BAE Systems said it would stop manufacturing regional jets because of a fall in demand for civilian aircraft since 11 September.

Bleak future

Airtours said it saw tough trading conditions in the year ahead for the leisure travel industry.

The company has seen a 8% fall in bookings for the winter 2001/2002, said chairman David Crossland.

"Although the outlook for the leisure travel industry this year is uncertain, and in the light of our record performance, growth this year will be challenging," he said.

But by the summer of 2002, there should be a recovery, Mr Crossland said.

Job cuts

The Airtours job cuts have been spread across all its divisions in all its markets and for all seasons.

More than half the jobs have come in the US, about 200 jobs have been cut in the UK and the remaining jobs have hit its Scandinavian and German operations, Mr Byrne said.

Following the cuts, the group's global workforce numbers about 27,000 workers.

Name change

The group, which owns the Airtours airline and the Going Places travel agencies, will also change its name to My Travel Group if its shareholders agree.

"The Airtours name has served us well and will continue to do so as our largest tour operating brand, Airtours Holidays, but there are enormous benefits from aligning the plc name with our new distribution brand," said Mr Crossland.

Airtours reported �147.4m ($209m) in operating profits before some exceptional expenses and e-commerce expenses.

But pre-tax profits fell sharply to �81.3m from �211.4m last time.

Shares in the company closed 13p higher at 245p in London on Tuesday.