Long haul traffic helped drive a rise in passenger numbers

The group said the move would result in savings of about �45m a year by 2008.

The news came as BAA posted a 9.6% rise in underlying operating profits to �412m ($728.9m) for the six months to 30 September, from �376m last year.

BAA, whose airports include Heathrow, Gatwick and Stansted, said it carried 82.3 million passengers during the six month period - up 2.5% on last year.

Passenger boost

The increase in passenger numbers was mainly driven by growth in long-haul traffic, boosted by new routes across the North Atlantic and to Asia from Gatwick, Edinburgh and Naples.

We want to streamline the management and admin staff of the business and get our managers closer to the business Mike Clasper, BAA Check BAA's share price

However, despite the rise in traveller numbers at the group as a whole, passenger levels at the group's three London airports slipped with the group blaming "a difficult summer and a weaker UK economy".

Retail sales from shops at BAA's seven UK airports rose 3.8% to �324m, which, combined with the increase in passenger numbers, help to boost overall revenues by 6.4% to �1.17bn.

Despite the rise in revenues, BAA reported pre-tax profits - excluding gains and losses on property disposals and other items - of �367m, down from �597m.

Looking ahead, the company said its cost cuts would "improve customer service and shorten decision chains, leading to more effective management and sustained efficiencies of �45m per annum from 2008/09".

The shake-up would focus on the back office and management areas, resulting "in around 700 fewer jobs", BAA added.

Improvement challenge

The move is part of its ongoing Delivering Excellence scheme and the changes are expected to result in one-off charge of �90m.

"We want to streamline the management and admin staff of the business and get our managers closer to the business to deliver that better leadership and get the right people in the right jobs," chief executive Mike Clasper told BBC Radio 4's Today programme.

He added the changes would help improve logistics at its airports such as Heathrow which handles 180,000 people, 240,000 bags and 1,400 aircraft each day.

"Getting all that to work reliably and consistently is a real challenge," Mr Clasper added.

"We think we can bring, partly because of the leadership changes, the sort of techniques Tesco would bring to managing these logistics so that we can get resources where we need to get them to."