BA chief: We will survive

BA CEO Ron Eddington: Tragedy may speed up European airline consolidation

LONDON, England (CNN) -- CNN Business International Presenter Becky Anderson spoke with British Airways CEO Rod Eddington about the future of his company and the airline industry following his announced plans to cut an additional 5,200 jobs in the wake of the terror attacks in the United States.

Anderson: Will you cancel or at least review your aircraft orders now?

Eddington: We have no new orders with Boeing ahead of us, but we do have a considerable order stream with Airbus, and we'll be sitting down with them and all our suppliers to review our medium- and longer-term commitments.

Anderson: By how much have revenues declined since last week?

Eddington: We haven't talked about the detail of revenue. What we're trying to do in the announcements today reflect our judgments about where demand is going in the short and medium term.

Anderson: Can you survive this?

AUDIO British Airways CEO Rod Eddington talks with CNN's Becky Anderson about the future of his airline 97sec / 990KB WAV sound CNN's Paula Hancocks reports on a meeting between airline bosses and the EU transport commissioner in Brussels 73sec / 811KB WAV sound   MORE STORIES • BA to axe 5,200 jobs   • European airlines hit by U.S. attack

Eddington: Of course we can. British Airways is a strong company and we'll come through this in good shape. But we have to take the sort of tough decisions we announced today, decisions that are really taken as a judgment based on what happened last week in New York, which was a terrible tragedy.

Anderson: You have already embarked on a significant cost-cutting regime. How much of today's announcement would have perhaps come anyway, despite what happened last week?

Eddington: We made some announcements two weeks ago, before the tragedy in New York, and those were appropriate announcements given the world as we saw it, and there were some substantial measures in that to reduce our costs. The announcement today reflects those new realities.

Anderson: August numbers were particularly bad for British Airways. How much worse can things get?

Eddington: Numbers in the summer this year for us were a reflection of foot-and-mouth in the UK and the substantial impact that had on tourism into the UK, and on the weakening global economy. We're clear about where we think demand is going to be in the short term, we've drawn heavily on our experience during the Gulf War to make those judgments, and we've announced some cuts in line with that. But of course the world is fluid.

Anderson: What do you need from the authorities?

Eddington: What we're asking the government for is to make sure we as a British carrier can compete, particularly against the U.S. majors, on a level playing field.

Anderson: Should any subsidies from authorities come on nation-by-nation basis, or should it come from European authorities?

Eddington: Clearly when we're clear about what's happened in the U.S., the government here in the UK and the team in Brussels will need to think through what the implications are for European aviation. We're obviously particularly interested in what it means for British aviation.

Anderson: What do you hope to achieve at today's meeting with European Transport Commissioner Loyola de Palacio?

Eddington: We're very keen for Madame de Palacio to understand the challenges we face, and to do what she can to help us come through that.

Anderson: Would you expect to see other airlines if not your own to go bankrupt at this stage?

Eddington: These are remarkable times, and it's impossible to know what the aviation industry is going to look like when we go through the tunnel, in part because we don't know what's going to happen in the global world in the next one, two, three, four months. What we've seen in New York, the terrible tragedy in New York, may just be the first step in a longer campaign.

Anderson: Passenger volumes fell some 14 percent during the Gulf War. Have we already got to a stage where things are worse than that?

Eddington: No, but of course in the aftermath of a tragedy like this, there are a lot of people in the UK who want to get home to America, and there are some people in America who want to come home to the UK. So in the short term, aircraft will be full on the North Atlantic. It will be a little while before we can be clear on what the impact on demand is.

Anderson: What does this all mean for your alliance with American Airlines? Is it still on?

Eddington: Of course. We're committed to try and work more closely with American, it's a critical relationship for us and we're committed to trying to get anti-trust immunity from the governments.

Anderson: How much more important is it now?

Eddington: I think it's important, it always has been, and it's very important in tough times that you work with your friends in this industry. If we had anti-trust immunity today, we'd be able to work more closely with American. The fact that we can't is not a good thing for us.

Anderson: This industry needs reorganizing, restructuring -- it needed restructuring before the dreadful U.S. attacks last week. What happens going forward?

Eddington: I've always felt there needed to be consolidation in Europe as there has been in North America in the last 20 years, that there were too many players in the European game, that the industry was too fragmented. Many people share that view. The real issue for us is when will consolidation take place, and what will a consolidated European industry look like. It may well be that this terrible tragedy accelerates that process, but it's too early to be sure.

Anderson: Specifically, what would you hope authorities either in UK for British Airways or in Europe will help you with?

Eddington: I don't want to go into the details today. My priority is to make sure we can compete globally with the U.S. majors. And if we can do that, we'll be in good shape.