UK airline to cut 1,200 jobs

The airline says it will cut up to 1,200 jobs

LONDON, England -- Fears for the future of long-haul air travel in the wake of the terror hijackings in the U.S. have deepened after Virgin Atlantic Airways announced 1,200 job cuts.

In a statement on Monday, the company also said it planned to pare back its services to the U.S. and Canada by 20 percent from October.

Flights recently introduced to Toronto and Chicago will be suspended while other North American destinations will be served by smaller planes.

Some 747s will be grounded, while others will be switched from transatlantic routes to those serving Asia and South Africa, airline spokesman Paul Moore said.

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Virgin CEO Richard Branson said: "Today's decision has been forced on us. It is clear to everyone that there will be significantly less traffic across the North Atlantic for some time."

Virgin said it would maintain its current flight capacities for several weeks, until it cleared the backlog of passengers stranded while transatlantic flights were grounded last week.

It is estimated that airlines around the world may face a $20 billion cost from the attacks as a result of the immediate suspension of services which grounded hundreds of aircraft worldwide.

As Virgin announced its move, it emerged that American Airlines, the world's largest carrier, is also expected to make job cuts.

In the U.S., Continental Airlines has already announced 12,000 job cuts and plans to scrap 20 percent of its flights.

British Airways executives met with union leaders on Monday but put off an announcement about any job cuts until later in the week.

In a statement, BA said: "Like many other airlines, both here in the UK and overseas, we are still working to establish the ramifications for the global aviation industry.