Outlook: British Airways

HAD BOB AYLING'S flight path gone according to plan, he would now be executing a victory roll somewhere out over the Atlantic and deciding what daring manoeuvre to attempt next as an encore to the American Airlines alliance. As it is, the chief executive of British Airways finds himself beneath thick cloud cover and grappling with the controls to avoid a nasty collision with ground zero.

It is Mr Ayling's misfortune that his attempt to navigate the AA deal past regulators in Brussels and Washington has coincided with the kind of downturn in business class traffic that has made BA's house brokers, Warburg Dillon Read, reach for the profit downgrades and aspirins in equal measure.

Mr Ayling denies that BA lacks a growth strategy, pointing to Oneworld, the marketing wheeze dreamt up two months ago when it became obvious that the regulatory turbulence facing BA-AA might be terminal. BA promises that Oneworld is more than an excuse for business class passengers to swop air miles and sit in one another's club lounges, but is coy about spelling out the revenue benefits.

Meanwhile, it is a question of BA matching its cost structure to the size and shape of the business. BA has done this very effectively over the last three years, taking pounds 600m out of the cost base and surviving a cabin crew mutiny. Even so BA's shares have underperformed the Footsie by a third during the same period. The fact that without its Business Efficiency Plan BA would not have had enough cash to paint another ethnic tailfin, let alone pay the dividend, has been ignored.

There is much more cost cutting in store. BA has also slashed next year's capacity growth plans. This should stand it in good stead against most other carriers as recession bites. But it is hardly the stuff that business legends are made of. There is scarcely a case for ejecting Mr Ayling. Whether boredom prompts Mr Ayling to press the ejector button himself is another matter.