Will struggling British Airways cut spending?

Troubled British Airways said Friday that it would slash capital expenditure by one fifth in the current financial year after posting another sharp drop in monthly passenger numbers.

"Market conditions continue to be very challenging with trading at levels well below last year," the struggling airline said in a trading update.

"In response to the challenging economic conditions British Airways has reviewed its business plan.

"Forecast capital expenditure has been reduced from 725 million pounds to 580 million pounds for 2009-2010 and is likely to remain at that level in 2010-2011."

The airline also announced it carried 2.93 million passengers last month, 4.9 percent fewer than in June 2008.

And BA repeated that it wanted to slash 3,700 jobs in the current financial year, which runs until March 2010. It has already axed 2,500 jobs worldwide over the past year.

BA also revealed that it would delay the delivery of its fleet of Airbus A380 superjumbos and announced more reductions to its summer 2009 and winter 2009-2010 flight schedules.

"The delivery schedule for the first six Airbus A380 aircraft has been extended by an average of five months with the first delivery still due in 2012," the carrier said.

"The schedule for the remaining six A380s has been extended by an average of two years with the final aircraft arriving in 2016."

In May, BA had reported an annual loss of 375 million pounds, blamed on plummeting demand for tickets as well as high fuel costs.

After diving into a financial loss, BA asked staff to work for free, while promising that chief executive Willie Walsh and finance director Keith Williams would forgo their July salaries.

Agencies

Seagate sacks CEO and to cut 800 workers

Seagate Technology has replaced its top two executives and said it plans to cut 800 jobs — 10 percent of its US work force — as the hard drive maker endures a bruising slowdown in technology spending.

Its stock fell more than 15 percent. In a surprise move, the Scotts Valley-based company announced that William Watkins, 56, Seagate's chief executive since 2004, and Dave Wickersham, 52, the president and chief operating officer, had both left the company, effective immediately. Seagate declined to make either executive available for comment.

The company also announced that it plans to cut 10 percent of its 8,000 US-based workers. It has 53,000 workers worldwide.

A familiar face will fill the CEO slot. Stephen Luczo, 51, a former investment banker who served as Seagate's CEO from 1998 until 2004 amid a wrenching restructuring, will have to engineer another big turnaround to get the company back on track.

Wickersham's jobs will be taken by Robert Whitmore, 46, Seagate's executive vice president and chief technology officer.

Seagate is the world's largest maker of computer hard disk drives, with more than 30 percent of the global market. But its business has suffered badly because of the economic meltdown, which has sapped information-technology budgets and demand for new personal computers and servers that use Seagate's products.

Oversupply in the industry has also hurt Seagate and other disk drive manufacturers. Luczo takes the reigns of a company whose stock price plunged more than 80 percent last year and that warned in December its fiscal second-quarter results would fall far below Wall Street's expectations. Seagate lowered its guidance for sales in the period by about $500 million, cautioning that slumping demand and price pressures were hurting the company more than it had anticipated.

Seagate, which is scheduled to report its full quarterly results Jan. 21, expects revenue of $2.3 billion to $2.6 billion.

Agencies