British Airways Retrenches

British Airways (BAB ) continues to shrink. On Feb. 13, Chief Executive Rod Eddington said the flag carrier would slash 5,800 employees, bringing the total layoffs since September 11 to 13,000--nearly a quarter of the former workforce. It will also cease operating on 10 routes and curtail its use of Gatwick Airport, south of London. But analysts doubt that the moves are radical enough to return the company to strong profitability. BA is expected to lose approximately $700 million for the current fiscal year ending Mar. 31.

Eddington may have wanted to go further. He has told colleagues BA needs to drastically pare its loss-making European short-haul services. BA Chairman Colin Marshall may have thwarted more radical steps. But Marshall, 68, won't be able to protect forever the empire he helped build.

Edited by Rose Brady

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