Unite, Britain’s biggest union, has written to the chief executive of British Airways to demand a meeting after the airline began a far-reaching review of its costs.

Rumours of severe cost-cutting at BA has caused concern among the airline’s 14,000 cabin crew and wild rumours have surfaced including the possible outsourcing of the entire inflight workforce to a third party.

Like all airlines, BA is struggling with high oil prices, which hit a record $140 a barrel yesterday, and is seeking ways to reduce costs. Rapidly rising fuel bills have forced airlines in the United States to ground planes and lay off thousands of pilots and cabin crew. They are also charging passengers for services that were once free, such as checking in baggage and refreshments.

Unite, which represents about 11,000 BA employees, this week wrote to Willie Walsh, the airline’s chief executive, to seek a meeting over possible job and pay cuts at the flag carrier.

BA has admitted that a review is taking place but rejected the wildest rumours circulating among its cabin crew, including the possibility of outsourcing staff.

In a statement to cabin crew, Simon Talling-Smith, the director of inflight services, said: “British Airways, like all airlines, needs to make plans to survive the economic downturn. Inflight services has been asked to explore options to address costs and managers have been spending time on this.”

BA has not yet completed its review and the staff working on the project have not reported their proposals to Mr Walsh. However, a spokesman for BA said yesterday that Mr Walsh would do whatever he could to remove the union’s fears.

A spokeswoman for Unite said: “Our members are really worried by this cloak-and-dagger project going on within BA. We are asking for an urgent meeting to address these concerns.”

Cabin crew are already using militant language to describe the pending cuts and industrial action could be taken this year. One employee said: “Looks like we may be dusting off the donkey jackets yet again.”

BA headed off a strike by pilots last month over a new airline it has started in Europe. It also faced a walkout last year over sickness and pay that was averted at the last moment.

Doug McVitie, the managing director of Arran Aerospace, an aviation consultancy, said: “Rather than one large round of pay cuts, I expect BA will not give the unions something big to fight over and will instead make lots of smaller cuts to things like allowances and benefits.”

Aviation analysts are concerned that if BA follows a similar path to the US carriers in charging for refreshments, the airline could lose its reputation for high service, and with it the ability to charge premium fares.

BA’s fuel bill is expected to rise 20 per cent to £3 billion this year. The airline has passed on some of the increase in fuel prices to passengers in the form of surcharges. It has increased the surcharge 13 times in four years and long-haul passengers now pay an additional £218 return.

Meanwhile, several airlines, including Air France-KLM and Cathay Pacific, have agreed to pay US criminal fines totalling $504 million to settle charges of a conspiracy to fix air cargo rates. Air France-KLM will pay the largest fine of $350 million. BA was fined a total of £270 million last year by US and UK authorities after it admitted price fixing passenger and cargo fares.

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