Airbus to cut 500 UK jobs

European aircraft maker Airbus plans to cut 500 jobs in Britain.

It also plans to reduce the number of hours for all of its employees by 20% because of falling demand.

The company's top executive Noel Forgeard said the reduction in working hours will be structured to avoid a need for outright job cuts. Instead, Airbus will rely on temporary layoffs, he said.

Forgeard spoke at a gathering in Toulouse to mark the first delivery of its A330-200 airliner to Air France, which ordered eight of the planes.

The cuts in Britain follow a decision by aerospace company BAE Systems to shut down production of regional jets, Forgeard said. BAE Systems holds a one-fifth stake in Airbus. The 500 workers concerned produce parts for BAE's regional jet division.

In London, a spokesman for British subsidiary Airbus UK said up to 2,000 jobs could potentially be eliminated - 18% of its workforce - unless employees agree to stop working overtime and accept other cost-cutting measures.

"On the manufacturing front, we have to get our costs down ... About 2,000 jobs would be at risk if we just carried on the way we are today," spokesman Howard Berry said.

British workers produce the wings and undercarriage for Airbus airliners. Airbus, based in Toulouse, has 47,000 employees, mostly in its four founding countries: Britain, France, Germany and Spain. About 11,000 employees are in Britain.

The September 11 attacks in the United States have cast a cloud over the airline industry. US giant Boeing, chief rival of Airbus, has said it plans to cut as many as 30,000 jobs by the middle of next year.