By Daniel Morrissey LONDON, Feb 13 (Reuters) - British Airways Plc (BAY) announced another 5,800 job cuts on Wednesday, taking total layoffs over the past five months to almost a quarter of the workforce, as it fights to return to profitability. Europe's biggest airline is hurtling this year toward its biggest ever loss since it was privatised 15 years ago, struggling to cope with a slump in demand for air travel, rising competition from no-frills carriers and a heavy debt burden. BA had already chopped 7,200 jobs in the wake of the September 11 attacks on U.S. cities -- a disaster that shattered demand for transatlantic air travel, BA's most lucrative route. But the market appeared unconvinced by the latest cuts, which were announced as part of a long-awaited review of BA's "future size and shape". The review also promised a shake-up of the airline's short-haul operations. BA shares were down five percent at 193 pence in morning trade in a generally flat London market. "They are going in the right direction but it's not enough," said an aviation analyst, who asked not be identified, adding it was likely the airline would have to slash more jobs next year. The airline said it would take 200 million pounds ($286 million) in restructuring charges over two years but estimated annual savings at 650 million pounds by March 2004. "We must transform BA into a leaner operation," Chief Executive Rod Eddington told reporters. "The conclusions of the review... signal a significant change to the size of British Airways as it takes further steps to address its cost base and sets the company on course to achieve a 10 percent operating margin," he added in a statement. NIPPING AT BA'S HEELS BA, which has been making losses for years in the European regional market, said it would reshape its short-haul operations. The "size and shape" review also involves cutting 52 percent of its capacity at London's Gatwick airport by summer 2003, 10 percent better shorthaul aircraft utilisation, flying to 15 percent fewer destinations and reducing the fleet by 49 planes. Biting at its shorthaul markets in Europe are the no-frills carriers such as Ryanair Holdings Plc (RYA) and easyJet Plc (EZJ), which have been wooing price-sensitive business and corporate customers from the full-service carriers. However, BA sold off its own budget airline Go last year and ruled out on Wednesday setting up another low-cost carrier. Instead, it plans to restructure its European short-haul operations to compete with the budget carriers by adopting Internet booking, simplifying ticket pricing, cutting travel agency commissions and by rationalising and making more efficient use of the aircraft fleet. Amanda Forysth, a fund manager at Standard Life Investments, said the targeted annualised savings by March 2004, of which 450 million pounds would be achieved by the end of 2002-03, would be the key to its reform agenda. "The key for them is to keep those cost cuts in the face of the continuing pressure on (average fare) yields," said Forsyth. "Obviously these remain very difficult times for the airline." Eddington also said BA would sell five of its long-haul Boeing (BA) aircraft and simplify the fleet at Gatwick to using just Boeing 777s for long-haul and Boeing 737s for short-haul. Eight routes at Gatwick will be transferred to London's Heathrow airport, the world's busiest international airport. The airline also said it plans to cut a further five long-haul and five short-haul routes and will announce the details in due course.