BA 'considers quitting shorthaul routes'

British Airways is considering abandoning its loss-making shorthaul routes and consolidating as an intercontinental carrier, a report has said.

Rod Eddington, chief executive at the troubled airline, has told senior City investors that BA may retreat to longhaul as part of a "think the thinkable" review of operations, the Financial Times said.

The proposal is being dubbed the "BOAC" option, in a nod to British Overseas Airways Corporation, which merged with shorthaul-focused British European Airways in the early 1970s to form BA.

"We have to find a new way of casting the business proposition," a senior BA executive told the FT.

Qantas rumour

Separate reports that the airline is to cut its shareholding in Qantas were on Wednesday denied by the Australian flag carrier.

"At this stage, Qantas has not been advised of any proposal by British Airways to reduce its shareholding," Brett Johnson, Qantas general counsel said.

It was later announced that BA's holding in Qantas had been trimmed by one percentage point to 21.4%, but because of a share dilution rather than a stock sale.

Traffic decline

News of the "BOAC" option follows reports over the weekend that BA is mulling proposals for withdrawing from its second base at London's Gatwick airport, in an effort to avoid reporting its first loss since privatisation in 1987.

British Airways has seen passenger numbers decline for 10 successive months, with the 11 September attacks only adding to the airline's woes.

Passenger volumes were 17.8% lower last month than in November 2000.

BA chief executive Rod Eddington has said he is confident that BA can survive the current crisis, as it had £1.1bn in cash reserves and could draw on a further £800m.