BA's chief executive, Rod Eddington, said the group had made good progress in taking costs out of the business and had delivered £701 million of annualised savings against a target of £650 million. The airline said the results showed that its recovery programme and other initiatives were helping to offset a continued deterioration in revenues. British Airways today said it had made half-year pre-tax profits of £60 million against £310 million in the same period last year. The airline said operating profits in the six months to September 30 were £235 million compared with £406 million previously.BA also announced today that its chairman, Lord Marshall, would retire at the company's annual meeting in July next year. He said: "If a teacher takes a bigger class, productivity rises but I don't think the CBI is calling for bigger class sizes.

The number of public-sector jobs rose by 181,000, but output per job fell by 0.5 per cent. In the private sector, output per job rose by 1.8 per cent in services and by 4 per cent in manufacturing.Mr Jones said: "The Treasury cannot ignore an efficiency problem that threatens to undermine the Government's investment programme." He urged the Government to adopt some form of benchmarking to measure performance and encourage competition between public-sector providers.But a Treasury spokesman said such measures had to take account of service quality. It calculates that unless the Government "gets a grip" on public sector costs this year they will eat up £7.5bn that would otherwise be available to improve services.Digby Jones, the CBI's director-general, said Gordon Brown, the Chancellor, faced a painful choice between scaling back investment and increasing taxes. When the private sector was "busting a gut" to be productive and competitive, taxpayers were entitled to expect the same of the public sector.According to the CBI, the unit cost of public service provision increased by 7.6 per cent over the past year, compared with the annual 4 per cent set out in last April's Budget, adding up to £7.5bn for the current financial year.In the year to June, public-sector wages grew by 5.1 per cent compared with 3 per cent in the private sector. The Treasury yesterday took the unusual step of publicly rubbishing a pre-Budget submission from the Confederation of British Industry, calling it "misleading" and "perverse". In its submission, the CBI warns that increased public sector spending is being eaten up by higher wage bills with little evidence of improvement in services such as health and education.

These schemes have already attracted protests from local people worried about their environmental impact.BP is the company behind a highly controversial pipeline from Baku in land-locked Azerbaijan to a port in Turkey.The Kovykta scheme will be financed through a mixture of debt and equity, with the World Bank likely to be called upon to provide some of the funding.. But the most commercial route in the study is the one that goes across the Yellow Sea."There is a separate oil pipeline project, proposed by the Russian oil giant Yukos, which would also pass by Lake Baikal, the deepest fresh water lake in the world, on its way east to serve China and Japan. The project will supply 20 billion cubic metres a year of gas to China, two thirds of the country's total consumption last year. It will also provide South Korea with 10 billion cubic metres annually, over 20 to 30 years.One industry source said: "Rusia Petroleum is looking at all sorts of routes.