Shares in British Airways fell today as the beleaguered airline unveiled 5,800 job cuts, including 3,000 at Gatwick.

By mid-morning the shares had lost three per cent as investors digested the announcement, detailed in our news story today.

BA's Future Size and Shape review, revealed to the City today, included details of 5,800 job losses and an overhaul of its short-haul network to compete with no-frills airlines such as easyJet and Ryanair.

BA also said it was cutting capacity and seeking to claw back costs of £650 million by March 2004, with £450 million of this secured by the end of the first year.

But there was speculation that the statement was not as far-reaching as some had hoped.

Most analysts were spending today at BA's Waterside head office, going over the update with senior management including chief executive Rod Eddington.

One analyst, Dominic Edridge, of Commerzbank Securities, said most investors would be waiting to hear what conclusions the researchers reached.

He said: "It is less dramatic that some people believed it would be.

"If they can achieve what they say they are going to do then that would be good, but it is too early in the day to see if it really is achievable."

Mr Edridge said it was not surprising BA was focusing on the budget airline model.

Commission and marketing costs on every ticket sold were weighing on BA, he said, adding: "All the airlines are starting to go down this route - every company needs to look at their supply chain and look at where the value is."