British Airways needs job cuts to survive, CEO says

British Airways needs to cut another 3,700 jobs to survive, chief executive Willie Walsh said at the airline's annual meeting in London on Tuesday.

The airline has already cut 2,500 jobs, but "there is no point trying to skirt around the fact that we need a fundamental and structural change to our employee cost base," he said. "These changes are essential to our short-term survival."

BA, suffering from a traffic downturn that has affected many carriers, also wants employees to agree to a two-year pay freeze.

US Airways on Tuesday said it will cut 600 ground jobs later this year. The airline will close or cut staff at two of its airport lounges, and use outside contractors for ramp service at some airports served by its regional carriers.

BA's pilots have agreed to a 2.6 per cent pay cut, but baggage handlers and check-in staff are fighting the cutbacks. Contract talks have not been successful, although they are set to resume with a government-backed mediator on Thursday.

The GMB union, which represents some ground staff, wants management to lead by example, spokesman Mick Rix said. Union protesters handed out leaflets outside the meeting rejecting measures the airline wants — like working for free in July — because staff simply can’t afford them.

"There is also no merit whatsoever in management adopting unrealistic and intransigent positions during discussions with staff representatives about how to respond to BA’s situation," the leaflet said.

As part of the airline's request that employees work for free in July, Walsh agreed to forego his monthly salary of £61,250 (nearly $114,000). But he conceded that would cause him "little pain."   

About 7,000 other BA employees agreed to take unpaid leave, part-time working or unpaid work in July, saving the airline up to £10 million.

BA is also grounding aircraft, delaying the delivery of new planes and cutting capital spending. 

It reported an operating loss of £220 million for the year ended March 31. A fuel bill of almost £3 billion was a big factor in the loss.