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BA to trim subsidies on staff meals

LONDON, Sep 23 – Loss-making British Airways will reduce subsidies on staff meals to save 2.7 million pounds (3.0 million euros, 4.4 million dollars) annually, according to an internal company newsletter.

The claim was made in the latest copy of staff newsletter BA News, which was obtained by Dow Jones Newswires and published by the group on Wednesday.

"Historically, BA has subsidized staff catering by up to 60 percent, at a cost of more than 6.5 million pounds per year to the business," Raghbir Pattar, manager of BA\’s UK Customer Partnerships division, told BA News.

"This is no longer financially feasible."

He added: "Cost savings will be delivered through simplifying the food range, reducing opening times where facilities are underutilized and implementing modest and proportionate price increases" from October 5.

A company spokesman declined to comment on the report, but told AFP: "We are reviewing all aspects of our business in the current economic environment."

In a bid to turn around its fortunes, BA is cutting about 3,700 jobs during its current financial year to March 2010. The group had already axed 2,500 jobs worldwide in 2008-09.

Other cost-saving measures have included pay-freezes and asking staff to work unpaid for up to one month.

In addition, BA also scrapped all free meals apart from breakfast on short-haul flights to save 22 million pounds per year.

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Back in July, BA revealed that it had slumped to a pre-tax loss in its first quarter and warned the outlook remained uncertain as the global downturn slashed demand for air travel.

BA posted a loss of 148 million pounds (173 million euros, 245 million dollars) in the three months to June, compared with a profit of 37 million pounds in the 2008 quarter.

That was the first ever Q1 pre-tax loss for the company since its privatisation in 1987.

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