BA to cut 500 jobs at regional arm

CitiExpress uses smaller jets on regional routes

British Airways has said it is to cut 500 jobs over the next two years at its regional airline CitiExpress, which flys short-haul routes in the UK and Europe.

Scottish workers seem likely to bear the brunt of the changes at CitiExpress, which include the closure of BA's reporting base at Aberdeen and the scrapping of two loss-making routes - from Cardiff to Edinburgh and Glasgow.

We are laying the platform for growth by getting our business in shape

David Evans, General Manager BA UK

Crew reporting bases in Belfast and Jersey will also be closed, CitiExpress said.

Meanwhile the UK's second biggest airline, BMI British Midland, warned that trading conditions remain "extremely challenging".

"We do not anticipate a recovery until next year," BMI said as it unveiled a rise in 2001 profits, thanks largely to the sale of its handling division and other restructuring moves.

Capacity cuts

Airlines worldwide have been struggling to adjust to the dramatic decline in passenger numbers which followed the 11 September suicide hijackings in the United States.

Cabin crew, support staff and engineering jobs will go

BA has cut thousands of jobs to tackle falling demand and growing competition from budget airlines, such as Easyjet and Go, on European short-haul routes.

CitiExpress decided the job cuts were needed after carrying out a review of regional operations, its own version of BA's sweeping Future Size and Shape review which was completed in February.

CitiExpress said it will withdraw 12 loss making regional routes altogether, to achieve cost savings of £20m a year by 2004.

Overall, it will reduce capacity on regional routes by 8%.

But the shake-up will include opening two new routes and more flights on its nine most important routes.

"We are laying the platform for growth by getting our business in shape," said David Evans, who heads BA's UK operations.

A BA spokesman reportedly said staff at Aberdeen will be offered work elsewhere within the airline, which is to hold talks with the unions.

BMI in profit - just

Meanwhile, BMI posted pre-tax profits, but admitted the figures relied heavily on exceptional items.

It made operating losses of almost £12m, but said these were mitigated by gains from the sale of its handling division and the transfer of its ticket reservation business to German carrier Lufthansa.

BMI posted pre-tax profits of £12.4m for 2001, up more than 50% on £8.2m the year before.

But revenues rose only 2.4% - to £757m - and the airline carried 5.2% fewer passengers at 6.7 million.

But BMI said its no-frills airline, Bmibaby, has had "an exceptionally encouraging start-up" and is trading ahead of expectations.

Bmibaby was launched in January 2002 and flies to half a dozen European destinations from East Midlands Airport.

Meanwhile, BA created CitiExpress in March by combining two of its subsidiaries, British Regional Airlines and Brymon.

Two more units will be consolidated into CitiExpress later this year - BA Regional and Manx Airlines.