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BA offers redundancy packages to cut costs

British Airways PLC said Friday it will offer redundancy packages as part of its plans to cut costs in the difficult economic climate.
/ Source: The Associated Press

British Airways PLC said Friday it will offer redundancy packages as part of its plans to cut costs in the difficult economic climate.

"We are in the worst trading environment the industry has ever seen," the carrier said. "Like all airlines, we are having to identify areas where we can reduce costs."

"It has been decided to give managers and senior managers the opportunity to apply for voluntary redundancy," it added.

The airline said there was no target for the number of redundancies.

The Daily Mirror newspaper reported that letters offering severance packages will be sent to some 1,400 staff members later this month.

BA's staffing costs are second only to its fuel bill, which is expected to top 3 billion pounds ($5.3 billion) this year.

While oil prices have fallen in recent weeks, the airline has struggled to benefit because of a fall of the pound against the dollar, the currency used for oil trading.

BA also is battling a general weakening in demand, with August traffic figures released by the airline showing a 2.7 percent fall in its load factor — a key measure of how full its planes are — compared to 12 months earlier.

Premium traffic — generally first-class and business-class customers — rose 2.2 percent, compared with a 2.1 percent fall in non-premium travel, but BA also warned that the outlook for premium travel remained "uncertain" until after the summer break.

BA shares were up 1.7 percent at 255.25 pence ($4.51) in midmorning trade on the London Stock Exchange.