BA plans major cost-cutting

A two-year programme to drive down costs and strengthen customer service has been unveiled by British Airways.
The new business plan for the airline, the first since Willie Walsh became chief executive, includes provision for reducing costs by £450 million and setting new standards for airline customers.

The plan covers the period from the end of March 2006 to the end of March 2008, when British Airways will move into its new operational home in Terminal 5 at Heathrow airport.

The plan includes:

áÊSavings across the airline worth £225 million in 2006-07 and a further £225 million the following year;

áÊInvestment of nearly £200 million to include a new Club World seat, on-demand films in all cabins and;


áÊEstablishment of new procedures aimed at major improvements in punctuality, and baggage performance in preparation for Terminal 5, plus greater use of self-service check in;

áÊProposals to enable the achievement of a 10 per cent operating margin and prepare the airline for future profitable growth.

Willie Walsh said: “This plan will make us fit for the future. By resolving our pensions deficit, reducing cost and delivering world-class customer service, we can make a 10 per cent operating margin a sustainable reality.

“Better management of our costs and having an absolute focus on customer needs will give us a lasting platform for success.

“Meeting the business plan’s objectives will put us in a position to take on our competitors in preparing for growth.”