British Airways To Cut Capacity, Trim 3,700 Jobs, Delay Planes As Traffic In June Drops

London, United Kingdom (AHN) - British Airways Plc (NYSE: BAY) posted another monthly drop in passenger traffic in June, forcing the Europe's third- largest airline to continue reducing capacity, delaying deliveries of Airbus 380 aircraft, grounding planes and cutting thousands of jobs.

In response to the challenging economic conditions British Airways said capacity for the current summer period (April to October) is now expected to be down 3.5 percent, from 2.5 percent, and in the winter down 5 percent, previously 4 percent.

The company said it will ground the remaining three mainline Boeing 757 aircraft in summer 2010 and a further three Boeing 747-400s in winter 2010.

British Airways is targeting to reduce by around 3,700 employees in this financial year, in addition to the reduction of around 2,500 achieved between June 2008 and March 2009.

The delivery schedule for the first six Airbus A380 aircraft has been extended by an average of five months with the first delivery still due in 2012.

The deliveries for the remaining six A380s have been extended by an average of two years with the final aircraft arriving in 2016, British Airways added.

In June 2009, passenger capacity, measured in available seat kilometers, was 1.7 percent from the year-ago period.

Traffic, measured in revenue passenger kilometers (RPK), fell by 3.8 per cent to 9.93 billion RPKs. Cargo, measured in cargo ton kilometers, declined by 9.8 percent.

The company said that the total passenger numbers down 4.9 percent at 2.9 million, while premium traffic slipped by 14.9 percent, with nonpremium traffic declined by 1.3 percent.

British Airways has projected that capital expenditure will be reduced from 725 million pounds to 580 million pounds ($951 million) for the current fiscal year ending March 31, 2010. The firm said that it is likely to remain at that level in the following year.