Northwest Airlines Corp will eliminate 10,000 jobs and Delta Air Lines Inc will reduce its flights and workforce as much as 20 percent after attacks pushed US airlines into a financial crisis.
The cuts represent 19 percent of 53,000 workers at Northwest, the fourth-largest US carrier, which last week reduced its flight schedule by a fifth. While Delta didn't say how many workers it will dismiss, the number may range from 12,000 to 16,000 based on the carrier's 80,000 employees and plan to reduce operations by 15 percent to 20 percent.
PHOTO: AP
"These reductions are necessary to maintain Northwest Airlines as a successful company," Chief Executive Richard Anderson said in a statement. Delta, the No. 3 carrier, outlined its plans in a message to employees by President Fred Reid.
Most US carriers are shrinking flight schedules as travelers avoid airplanes because of last week's hijackings and attacks. Half of Northwest's seats and 70 percent of Delta's seats are empty, spokesmen said. Including Northwest, US carriers have disclosed plans to lay off or fire more than 78,000 workers since Saturday, and Boeing Co will fire another 30,000.
The US aviation slowdown hurt carriers overseas as well.
Airlines say they're trying to cope with a halving of their revenue stream just as security costs rise. Carriers including Continental Airlines Inc. and America West Holdings Corp. have said they are running through cash reserves and may face bankruptcy if aid isn't provided.
Atlanta-based Delta will decide in the next several days how many workers at its main carrier and commuter affiliates will be dismissed, and it expects some of the job cuts to be voluntary, spokesman Tom Donahue said. Most Delta employees, except pilots, aren't unionized and won't have contractual "furloughs" like some airline workers.
"We estimate the drop in the size of operations will be in the range of 15 to 20 percent," President Fred Reid said in a message yesterday to employees.
Delta planes are flying only about 30 percent full, Donahue said. The company expects to reduce its workforce even if the aid package is approved, Donahue said.
Northwest's planes are about half full, compared with almost 81 percent in August, spokesman Doug Killian said. Northwest said yesterday it would reduce flights 20 percent as it reviewed staffing needs. The St. Paul, Minnesota-based carrier said it expects flight reductions to occur by Oct. 1.
"It's the best thing they can do for their remaining employees if they want to stay in operation," said US Bancorp Piper Jaffray Cos debt analyst Joel Denney, who said he doesn't own stock in Northwest.
While Northwest plans to keep serving all mainland US destinations, it may reduce the frequency of some flights.
Northwest suspended Amsterdam-Delhi service, and Killian said that's the only Northwest jet route it plans to suspend.
The job reductions at Northwest will involve about 9,000 contract workers and 1,000 in management, Northwest said. Health benefits for contract workers will be extended to Dec. 31. Northwest's Air Line Pilots Association said in a message to its members today that it expects Northwest to furlough 850 pilots over the next 11 months.
"When the economy rebounds and the airline industry recovers, we hope that these employees will exercise their recall rights and rejoin the airline," Anderson said.
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