British Airways to reduce short-haul flight network

British Airways (BA) has become the latest airline to announce cutbacks as a result of soaring fuel prices.

The airline is to ground 20% of short-haul flights with the majority being at London’s Gatwick airport. However, sources at the airline believe Heathrow, which is the airline’s main base, will also experience cuts but on a smaller scale.

Just last week, budget airline easyJet announced that it is to cut flights over the winter as it battles with soaring fuel prices. Over the 2008-09 winter period, it is to reduce capacity at London’s Stansted airport by 12%.

Soaring oil and fuel costs are having a devastating affect on the airline industry. US carriers including ATA Airlines, Aloha Airgroup and Skybus Airlines, EOS and Maxjet have all ceased trading as a result.

Many others have been announcing thousands of job losses with US carrier United Airlines axing 7,000 staff.

Australia’s flagship carrier, Qantas Airways, confirmed it is slashing 1,500 jobs as it battles with rocketing fuel costs.

BA is expected to announce the cutbacks on Friday, together with its quarter one results. It is likely that BA’s quarterly figures will result in analysts downgrading their forecasts for the company’s annual profits.

In a further setback for the airline, BA has admitted that it colluded with Virgin Atlantic on setting fuel surcharges. However, Virgin has escaped prosecution because it first reported the collaboration to the authorities.

BA’s chief executive, Willie Walsh, is likely to be questioned on the continuing fall-out from the company’s part in the scandal.

Story link: British Airways to reduce short-haul flight network