BA review - key points

A further 5,800 jobs to go 10 routes axed Continuing reduction in fleet to 305 planes 8 routes transferred from Gatwick to Heathrow �650m costs saved a year

The move, part of a package aimed at achieving cost cuts of �650m a year, follows a wide-ranging review by chief executive Rod Eddington designed to return the airline to profitability.

Ten routes will also be cut, and the size of the BA fleet slimmed.

The carrier is also from June to cut fares on shorthaul European routes in an effort to boost passenger numbers.

"We must transform British Airways into a simpler, leaner, more focused airline so we can thrive and prosper in an increasingly competitive market," Mr Eddington said.

'Worse than expected'

Bill Morris, general secretary of the Transport and General Works Union, said the job cuts were worse than had been expected.

Where BA's 13,000 job cuts are biting

Pilots: 400 Cabin crew: 3,400 Heathrow customer service staff: 800 Gatwick customer service staff: 550 Cargo employees: 800 Others: 2,950

"We expected mild surgery but what we have got is butchery," he said.

But he told Radio 4's Today that the union would do its bit to ensure BA returned as a major force in the aviation world.

"We will not be rushing off to the barricades, but we will certainly be rushing to the negotiating table," Mr Morris said, calling for "managed" job cuts.

BA in Wednesday's statement pledged to work with union leaders to achieve the job cuts target through "voluntary means".

Competitive pressure

BA admitted the decision to lower fares on shorthaul European flights was prompted by competition from low-cost airlines, which have thrived despite the industry downturn stemming from the 11 September attacks.

The firm will also mimic budget carriers, such as Easyjet, in offering lowest fares to passengers who book through the internet, and slashing commission to travel agents.

Mr Eddington said BA would neither become a budget airline, nor "launch one".

" We will compete profitably and intelligently alongside them by adopting what they do well - online bookings, high aircraft utilisation and pricing simplicity," he said.

Gatwick withdrawal

BA declined to reveal details of the routes cut, beyond saying they would consist of both longhaul and shorthaul routes.

The firm also revealed it was accelerating its operational focus on Heathrow, transferring a further eight routes from Gatwick.

BA capacity at Gatwick, where Easyjet has announced an expansion programme, will by summer 2003 have dropped by 60% in four years.

City reaction

The programme received a mixed reception in the City.

Dominic Eldridge, at Commerzbank, said: "If they can achieve what they say they are going to do, then that would be good.

"But it is too early in the day to see if it is really achievable."

Amanda Forsyth, a fund manager at Standard Life Investments, said it was "reassuring" BA was revamping its European shorthaul operations.

Alex Scott, analyst at Seven Investment Management, said the move made sense but was "not revolutionary".

"It might be enough to keep markets happy for the time being."

BA shares stood down 4.75p at 199p in lunchtime trade.