Job cuts at BA are not entirely bad news: comment

Reports that British Airways is about to turn itself into a "virtual airline" appear to be a little premature. Undoubtedly, if you happen to work in baggage handling or check-in, then New BA in the New Millennium, as the slogan has it, ain't going to be the place for you in a few years' time.

But the idea that BA's chief executive, Bob Ayling, is about to take the axe to the airline, slashing its workforce so hard that the only folk it will employ are those who fly planes or sell tickets, looks fanciful. True, BA intends to take 5,000 out of the headcount over the next 18 months as it strives to achieve cost reductions of pounds 1bn. But it also intends to take on just as many people so that by the end of the exercise its workforce will be... er... exactly the same. A greater proportion of them will be "skilled in customer services and languages", as the PR bumpf puts it, and fewer will have engine grease under their fingernails.

After all, you don't exactly need to be a polyglot to change a fan blade. In the brave new world of BA, whoever can do the job at the market cost rate will get it. This sort of cost-cutting through outsourcing is the mantra they chant at the best management schools.

The added stimulus BA has is that, profitable as it might be, the cost of flying every seat mile is growing faster than the price customers are prepared to pay for every seat mile. Those beds in the sky, seat-back videos and in-flight gambling dens do not come cheap.

Virtual airline or not, it is understandable that BA's unions should be a little twitchy about Mr Ayling's vision - hence their little ploy of leaking the story two weeks ago. Perhaps they should take comfort from the alliance BA is stitching up with American Airlines. Over there, the airline unions know a thing or two about how to bring their industrial muscle to bear when confronted with this sort of thing.