BA's operational staff will barely be affected

The move is expected to lead to 3,000 job losses over the next 12 months.

BA is hoping a leaner company will fare better as fears of terrorist attacks, the war in Iraq and the outbreak of the Sars virus dent demand and earnings.

Announcing the plans, chief executive Rod Eddington said that the "last two years have been about survival - now we want to be in a position to prosper".

Natural wastage

As a result, the company will aim to cut costs at its head office by 30% and by 15% in operational areas.

The job losses are expected to be achieved through natural wastage, voluntary redundancy, early retirement and staff going part-time.

BA has not been hiring since the September 11 terrorist attacks and said that on average it sheds about 3,000 jobs a year.

Any new redundancies, which will not affect the number of flights, are in addition to the 13,000 jobs due to go by the end of March under BA's Future Size and Shape programme.

The company had made savings of �700m a year by the end of last September, ahead of its target of �650m by next March.

Mr Eddington said: "We have made considerable progress on reducing our costs over the last two years, but revenue fell sharply during the same period."

"Our outlook on revenue is slightly better, however it is clear our cost base still remains too high."

In the City, investors welcomed the news from BA and the company's shares closed up 13.75p, or 4.7%, at 305p.

Negotiations

Trade union officials said they are working closely with the company to ensure that there are no enforced redundancies.

Union representatives went to Heathrow on Wednesday to be briefed by airline officials.

"People will no doubt look at what BA has said today and try to equate it to job cuts," said Brendan Gold, national secretary for civil aviation at the Transport & General Workers' Union.