Plotting a course for the future
HOW and where the BA cut-backs announced by chief executive Rod Eddington today will bite.
The effect on Heathrow
It is Heathrow and especially its Waterside HQ which is bearing the brunt. More than a third, 3,000 jobs are to go at Waterside. The total number going at Heathrow is 6,600 of the 13,000 axed, with big cuts among cabin crew based there, as well as in sales and engineering. With cuts and transfers in routes from Gatwick what BA is signalling is that Heathrow is very much the concentrated hub of its operations from now on.
The effect on Gatwick
Gatwick has been hit proportionately harder with 3,000 jobs going across all its operations including its head office staff. BA is almost pulling out completely from longhaul services at Gatwick reducing the number of destinations from 41 to 15 by the summer of 2003 and several short-haul routes have also gone. The good news for Gatwick is that BA is not pulling out altogether, as was once feared. It has also signalled that Gatwick will become the centre of a reshaped European strategy which will see it fight it out with the budget airlines. And where BA is pulling out of take-off and landing slots, the likes of easyJet, which is starting several services at Gatwick, is ready to step in.
The cut in routes
At Heathrow, BA has been pulling back from the number of services to its major US destinations: JFK in New York, Boston and Washington. At Gatwick, the JFK service has already been cut and it has reduced services to other US destinations such as San Diego and Houston. Other longer haul flights to the Middle East and South America have also been much reduced. On the short-haul, the £10m a year loss-making Heathrow-Belfast route has gone and other loss-making routes from Gatwick to southern Ireland and the likes of Rotterdam, Stockholm, Zurich, Gdansk and Montpelier have been pulled. BA says it will cut another five long-haul and five short-haul routes. In a bid to cut costs many other
Gatwick routes, to eastern Europe and places such as Mauritius, Buenos Aires and Lagos are moving to Heathrow. In total more than 200 scheduled flights a week have been pulled.
The future for BA
BA has, historically, had high costs and chief executive Rod Eddington has moved to rectify that by cutting a quarter of the workforce in the past four months. Key to its future is the return of the lucrative business passenger market and the number of people flying the North Atlantic. The signs are that business is coming back. The short-haul market could still be Eddington's nemesis.
