We will not become a no frills airline, nor will we launch one

Rod Eddington, BA chief executive

The carrier has revealed that its latest profits revival strategy, after breakthroughs such as sleeper seats and garish tailfins, involves targeting not besuited high-flyers but shorts-wearing, shorthaul passengers.

Left with the bathwater

Eight months after selling its budget carrier Go for �100m, BA has realised it chucked out the baby rather than the bathwater.

BA is on European shorthaul routes to introduce the internet booking, rapid aircraft turnaround and pricing "simplicity" beloved of the likes of low fares airlines.

Yet it will apparently retain under its rediscovered union jack livery the stirring qualities which earned it the right to boast, without ridicule, of being the world's favourite airline.

"We will not become a no frills airline, nor will we launch one," chief executive Rod Eddington said, announcing the results of his "future size and shape" review.

"We will compete profitably and intelligently alongside them by adopting what they do well."

Rival airlines

Having been one of the world's earliest airlines, tracing its history back to 1919, BA has experienced some delays in realising the potential of the budget market.

Besides creating its own enemy in Go, the UK low cost sector includes the likes of Buzz, Easyjet and Ryanair, with bmi British Midland's offering awaiting take-off

Yet there are still opportunities in the sector, mainly on the Continent, typically in countries whose flag carriers, offered ample state protection, have proved slow to exploit the budget carrier market.

When Easyjet in January announced it was considering a record order of new aircraft for a budget airline, it told BBC News Online of the potential in countries such as Germany and Italy.

And with British Airways still Europe's largest airline, with a developed - if shrinking - operational network, it could be well placed to feature prominently in at least the second chapter of budget carrier growth.

Deliverability

If it has retained sufficient infrastructure to do so, of course.

One trouble of cutting subsidiary routes is that it reduces BA's feeder network, invaluable for locking in customers wishing to fly on aboard more profitable flights.

It will require significant management skill to achieve headline savings of �650m a year without losing operational effectiveness

The value of such traffic to BA has only been raised by the collapse of attempts to form an alliance with American Airlines.

And the paragraph within Wednesday's statement which has, unsurprisingly, garnered most publicity is the one revealing 5,800 job cuts, in addition to 7,200 previously announced.

Catch-up

Even a preliminary analysis of the range of data in the document shows that BA faces a challenging task in ensuring its remaining resources are appropriately utilised.

The firm is shedding almost one quarter of its staff between 2001 and 2003, yet reducing its fleet by 13% through mothballing and sales, and cutting capacity by only 9%.

Certainly BA, which has already lost significant capacity since 1999, is to some extent playing catch-up with workforce numbers.

But it will require significant management skill to achieve headline savings of �650m a year without losing operational effectiveness.

Union 'anger'

Yet beneath the general furore surrounding the job cuts, which have warranted comment even from Number 10 Downing Street, lurks between the lines a surprising absence of anger among workers' representatives.

Roger Lyons, general secretary of Amicus called the loss a "devastating body blow", but failed to decry the company itself.

Investors are reported to have given Mr Eddington until the end of the year to the ensure BA's "future shape" is a better one

And Bill Morris, general secretary of the Transport & General Workers Union, while providing a headline quote along the lines of "expecting surgery but getting butchery" continued by advocating co-operation with BA.

"We will not be rushing off to the barricades, but we will certainly be rushing to the negotiating table," he said. Hardly fighting talk.

Perhaps union leaders realise the severity of BA's situation.

Perhaps efforts by Mr Eddington to keep unions informed, a drive blamed by City analysts for delaying for months the release of Wednesday's review, have reaped labour relations benefits.

But at least Mr Eddington can address the challenge of delivering the "future size" of BA without having to confront unions as well as Easyjet, Go and Ryanair.

'Future shape'

As for BA's new strategic direction, analysts are as yet unclear of its potential for returning the carrier to profit.

But investors are reported to have given Mr Eddington until the end of the year to the ensure BA's "future shape" is a better one.

If not, he himself faces becoming job cut number 13,001.

And it may be more than the odd spare BA aircraft which is repainted in a rival airline's colours.