British Airways plans to slash costs by £13 million at Gatwick in a bid to turn around its short-haul operations.

The group has already reduced losses from £310 million in the year to March 2000 to £26 million in the year to March this year.

But it announced more progress was needed during the next two years. Measures will include a review of property needs, a reduction in handling costs and schemes to increase productivity.

BA has reduced its presence at Gatwick in recent years to concentrate on long-haul routes at Heathrow.

The group plans to experiment with new European destinations at Gatwick in an attempt to compete more effectively with low-cost carriers easy-Jet, Ryanair and Monarch Airlines.

Other revenue-increasing proposals include stepping up its marketing campaign to target potential new customers living in Sussex, Surrey and south London.

Spokesman Richard Goodfellow said the mixture of slashing costs and increasing revenue will hopefully make BA's short-haul operations at Gatwick profitable.

He said: "It's early days. We have started a consultation period with employees and trade unions on how best to achieve internal savings.

"We are also looking to introduce some new routes around Europe and see what markets work for us. Countries in the eastern Mediterranean block, such as Croatia, Bulgaria and Albania, are trying to improve their image as tourist destinations.

"They are marketing themselves to the British public in terms of second homes, weeks away and package holidays. They are saying the Mediterranean is not just about Spain and Greece any more and we are looking to tap into the new markets."

The short-haul charter market for all airlines at Gatwick in August suffered a 9.2 per cent drop compared to last year due to the growth in independently packaged holidays.

Overall charter traffic at Gatwick in August was down seven per cent on last year but strong growth in the airport's European scheduled and longhaul markets helped it to achieve an overall increase of 1.1 per cent.

BA has already begun to experiment with its routes, introducing 11 new European destinations at Gatwick this year. Amongst these are Split, in Croatia, and Tirana in Albania.

The company has rejected proposals to abandon business class. It said it will maintain its two-class cabin structure on its short-haul Boeing 737 fleet.

Mr Goodfellow said: "We need to work much harder to get short-haul flights back into profit. Gatwick is still very important to us but we have to make sure every route we operate does make a contribution to the business.

"We hope we will have a very rosy future in Gatwick but we need to work very closely with staff, the public and customers to make Gatwick perform for us in the future."

Tuesday 20 September 2005