BA plans online upgrade in £450m cost-cutting drive

British Airways (BA) is planning to upgrade its ba.com website and increase the use of self-service check-in as part of a £200m investment aimed at slashing the airline's costs by £450m.

The two-year programme to drive down costs and improve customer service is the first business plan of new BA CEO Willie Walsh since he took over in October last year.

BA is aiming to make cost savings of £225m in financial year 2006/07 and a further £225m in the following financial year.

The £200m investment covers upgrading ba.com, a new Club World seat and on-demand films in all cabins. Last year a third of BA customers booked their seats directly with the airline and most of those booked on ba.com. The new business plan aims to raise that to half by 2008.

Further savings will come from new processes introduced ahead of the Heathrow Terminal 5 opening and greater use of BA's self-service check-in system.

Walsh said in a statement: "This plan will make us fit for the future. By resolving our pensions deficit, reducing cost and delivering world-class customer service, we can make a 10 per cent operating margin a sustainable reality."

IT has played a key role in the turnaround in BA's fortunes since the crisis in the global travel industry following the 9/11 terrorist attacks in New York. Speaking at silicon.com's CIO Forum last year, BA CIO Paul Coby said he helped the airline cut IT costs by 40 per cent.