BA: fewer flights, higher fares

BA is likely to announce a 3-5% cutback in capacity for winter 2008-09 and ticket-price rises, possibly of more than 4%, were "absolutely inevitable", the airline's chief executive Willie Walsh said.

He also announced the airline would soon be launching a £2 million advertising campaign to promote Heathrow's Terminal (T5) which had a such a shambolic opening in March this year.

Mr Walsh was speaking after a two-and-half hour BA annual meeting in London in which some shareholders were critical of the T5 debacle, with one shareholder calling for the resignations of Mr Walsh and BA chairman Martin Broughton.

After the meeting Mr Walsh said capacity would be reduced for the winter period running from October 2008 to March 2009.

Asked whether higher fares would mean there would be no further fuel surcharges, he replied that there could be both higher fares and fuel surcharges. As to the extent of fare rises, he said that although no firm decision had yet been made, they could be more than 4%.

He said he expected there would be a 3%-5% reduction in growth on the winter programme but he did not expect to see any suspension of any long-haul routes. Asked what flights might be axed, he said there might be "one or two" short-haul flights taken out of the programme this winter.

He said BA's recruitment levels had slowed and, although there was not a recruitment freeze, there would be areas in the winter programme where new recruits would no longer be needed.

He said high food and energy prices were bound to have an impact on the travelling habits. He said: "I think it's absolutely inevitable that prices will go up. Fares will have to go up."

On T5, Mr Walsh said: "We made mistakes and we let people down. Though the mistakes were by no means the sole preserve of BA, we held our hands up, we took responsibility and we apologised."