BRITISH Airways CitiExpress is withdrawing loss-making services in a bid to strengthen its position in the domestic and European short-haul market.

But the decision is good news for Newcastle Airport, which will become a dedicated aircraft base with six Jetstream 41 aircraft.

The move is expected to create 30 jobs for pilots and cabin crew at the airport, adding to the 25 engineers based there.

The withdrawal of 12 routes follows a regional review of operations, announced last October, aimed at saving £20m a year by 2004. The review has led to about 200 job losses at the airline.

However, CitiExpress plans to increase capacity and frequency on key business routes, and match the size of aircraft more closely to local markets.

It intends to increase the daily frequency of flights between Newcastle and Aberdeen (five flights to six), Birmingham (three to four), Bristol (three to five), Dublin (three to four) and Southampton (two to four).

Loss-making routes to Cardiff and Cork will be withdrawn by the end of next month.

David Evans, British Airways head of UK business said: "We now have the framework to develop our business, and deliver the required cost savings.

"We are laying the platform for growth by getting our business in shape, providing us with a clear business direction for our staff and customers.

"We will have the right aircraft at the right time on the right routes and, where the business demands, we will have new services and extra frequency."

He said the changes would mean employing the equivalent of 500 fewer people over the next two years and the issue would be the subject of consultation with trade unions and staff representatives.