US airlines of all sizes are laying off, furloughing and outright firing workers as the oil cost crisis deepens, and the cuts so far are likely just the beginning.
As of early July, US carriers had announced plans to eliminate about 19,000 jobs. According to Chicago-based jobs tracking firm Challenger, Gray and Christmas, the first half total for 2008 exceeded the 11,000 cuts of all of 2007, while second-half totals are likely to be a near record.
American Airlines plans to cut about 7,000 jobs this autumn, while United says it plans to eliminate at least 3,150 positions, Continental 3,000 and Northwest 2,500. American's cuts, from a total of 85,500 workers, are the largest of any so far.
Some carriers are trying to cushion the blow. Continental, for instance, has reached an agreement with its 5,000-member chapter of the Air Line Pilots Association to allow voluntary leaves of absence that would allow pilots to maintain their benefits during their time away from the carrier. Northwest, meanwhile, is trying buyouts and other voluntary plans.
At American, a one-time voluntary severance plan would offer generous incentives for early retirements under deals with the flight attendant and mechanics union. But American's pilots have resisted a similar plan. Allied Pilots Association negotiating committee chairman Mark Stephens ridiculed the plan as "management's 'retirement management strategy'".
Some of the non-majors are also aggressively cutting jobs. Midwest Airlines is slashing 1,200 jobs, representing 40% of its workforce. At AirTran, furloughs of as many as 10% of the airline's 8,900 workers are possible this autumn. The low-cost carrier also plans pay cuts of 5% to 8% for most workers. Frontier, which is in bankruptcy reorganisation, plans to furlough about 150 pilots and 170 flight attendants.
The cuts apply to all job descriptions but Bill Swelbar, the director of the MIT Airline Project, says most positions to be eliminated are lower-paying jobs farther down the seniority lists. He adds: "It may seem counterintuitive, but, compared to other legacy industries such as automakers or steelmakers and their respective unions, airline labour can say that they preserved many high-paying jobs. But reducing labour rates is probably not an answer and could not be sufficient to turn the expected earnings deficit positive."
Source: Airline Business
