British Airways will withdraw all passenger services between Belfast and London Heathrow airports and axe its daily flights between Gatwick, Shannon and Cork because of the impact of the US terrorist attacks.

The airline said that, because of the downturn in the number of people flying since the attack in New York, it planned to reduce existing schedules and rationalise some services to the US, the Middle East and Europe.

British Airways' decision to axe its six daily Belfast to London Heathrow flights will mean the closure of its operating base at Belfast International Airport from October 27th. Although the airline will continue to handle cargo in Belfast, it will close its lounges and withdraw support staff.

The move is a major blow to TBI plc, the owners of Belfast International Airport, who will also lose BMI British Midland, one of its largest carriers, to Belfast City Airport next month. In a statement, the company said the loss of the British Airways business would cost it £6.9 million sterling (€11 million) in lost profits.

British Airways currently employs 310 staff in the North. It is believed that up to 160 jobs could be under threat as a result of the termination of the Heathrow route.

Although the airline did not directly employ staff in Shannon and Cork, there are concerns that some contract positions at the airports could also be jeopardy.

British Airways said that the introduction of a "reduced flying programme" was the first phase of measures to address the changing environment since the events of September 11th.

Mr Ian Reid, British Airways general manager UK and Ireland, said the decision to axe the affected routes had not been an easy one. However, he did admit that the Belfast to London Heathrow route had a history of unprofitability, despite the fact that around 400,000 passengers used the service each year.

Mr Reid said that, in the past four years, losses on the route had amounted to £38 million.

"Over the years we have tried hard to maintain this service. We now face exceptional circumstances in a very difficult operating environment and, therefore, tough decisions must be taken to protect the commercial interests of the airline," he added.

Business and community leaders in the North have greeted the airline's announcement with dismay.

It is the second major setback for Northern Ireland in as many days after Bombardier Aerospace warned on Wednesday that 2,000 jobs could be under threat in the North because of the slowdown in the aviation industry following the terrorist attacks in the US.

Mr David Burnside, the Ulster Unionist MP for South Antrim, who was previously head of public relations at British Airways, believes the airline has made the wrong decision regarding Belfast.

"For what most people still regard as the national carrier to pull out of one part of the United Kingdom is very sad, particularly with the long-standing relationship British Airways has had with Northern Ireland for almost half a century," Mr Burnside said.

Speaking the at the Confederation of British Industry's annual lunch yesterday in Belfast, Mr Mark Ennis, the body's chairman, said businesses in the North were now operating in "uncertain times, with increased risks and increasing levels of anxiety".

He said the current political situation in Northern Ireland was not helping the economy.

"No one will benefit if the Belfast Agreement collapses. Only full implementation will give the necessary political stability that will enable Northern Ireland to continue building on the economic progress already made," Mr Ennis added.

But one company - located on the Garvaghy Road outside Portadown, Co Armagh - yesterday showed that there are businesses determined to survive despite the current political and economic climate.

Answercall Direct has invested £913,000 in a new customer contact centre in Portadown, which now employs 68 people. Ms Kelsey Buck, the company's managing director, who founded the business less than two years ago, said the expansion, which is backed by the Industrial Development Board, should position Answercall Direct for global growth.