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British Airways May Reduce Miles It Flies

August 09, 1999|Reuters

British Airways is expected this week take a radical step in its bid to fight falling yields by announcing that it plans to cut sharply the number of passenger miles it flies, industry sources told Reuters. The sources said BA is expected to announce today that it will cut the number of passenger miles it flies by 12% during the next three years by reducing a number of unprofitable routes and switching to smaller aircraft. Most of BA's rivals have been increasing capacity, but BA earlier this year said it planned to rationalize its short-haul network as part of a new strategy to boost margins on each flight by reducing economy seats and increasing profit from business cabins. BA said in early July that it expected growth in capacity to slow even further this year. The carrier said it would reduce its growth plan of 0.6%. BA's announcement will coincide with its first-quarter results, which are expected to show a drastic drop due to billowing overcapacity and high fuel bills.

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