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BA outlines £450m cost savings
British Airways aims to achieve cost savings of £450 million in the two years prior to moving into Terminal 5 at Heathrow in March 2008.
The airline wants to drive costs down by £225 million a year over the next two financial years.
A new business plan unveiled by chief executive Willie Walsh includes an investment of almost £200 million in new Club World seats, on-demand films in all cabins and ba.com.
The airline wants to see the proportion of online bookings worldwide through its website rise from a third to half by March 2008.
The plan, which includes improvements in punctuality and baggage performance prior to the switch to the new terminal, comes against a background of the airline’s fuel bill being up by around £400 million for 2006-07.
BA also revealed that flights to Australia and Spain will not move to Terminal 5. Instead they will operate alongside Oneworld alliance partners Qantas and Iberia from Heathrow’s Terminal 3 from March 2008.
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 10% operating margin a sustainable reality.
“Better management of our costs and having an absolute focus on customer needs will give us a lasting platfrom for success.
“Meeting the business plan’s objectives will put us in a position to take on our competitors in preparing for growth.”
Report by Phil Davies
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