updated 4/20/2006 2:26:10 PM ET 2006-04-20T18:26:10

British Airways PLC issued a direct challenge to European low-cost carriers Thursday, slashing several short-haul fares by as much as 50 percent as it tries to win back passengers.

BA, which has struggled to maintain its market share against price undercutting by budget airlines such as Ryanair Holdings PLC and easyJet PLC, said it would offer greatly reduced one-way tickets to 65 destinations.

The airline said the price cuts were part of an overhaul of the airline's fare structure, rather than a one-off promotion.

"This is not a short-term gimmick, but a long-term commitment to our millions of customers to offer low fares every day of the year," commercial director Martin George said.

The cuts came just days after BA announced a further increase in the fuel surcharge on its long-haul flights because of soaring crude oil prices.

Shares in BA dipped 0.07 percent to close at 340.25 pence ($6.06) on the London Stock Exchange.

BA said it would continue to provide full service to customers booking inexpensive tickets.

Unlike the low-cost airlines, BA will not charge extra for food and drink onboard or for checked-in luggage. Ryanair introduced charges last month for passengers wanting to check in bags.

The new BA fares include all taxes and fuel surcharges, but there is a charge for passengers who do not book online.

Airfares across Europe have been driven down in recent years following the birth of the "no frills" airlines.

Lufthansa AG, Germany's biggest airline, announced new low fares on 181 international routes and on 51 German domestic flights last month.

BA's best price on a one-way flight from London to Naples, Italy, is now 39 pounds ($70) _ a big drop from the 286 pounds the airline charged in 1996. Similarly, a flight from London to Bordeaux, France, has fallen to 29 pounds ($52) from 206 pounds.

BA said there would be no job cuts as a result of the lower ticket prices launched Thursday.

Chief Executive Willie Walsh has outlined plans to cut costs at the airline by 450 million pounds ($800 million), including the loss of 600 management jobs and a further round of cuts in call centers and travel shops.

The airline has twice raised its fuel surcharge on long-haul flights since September by a total of 10 pounds ($18) as oil prices surge. Oil futures in New York hit a record high of $72.49 Thursday.

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