Airlines announce cutbacks, layoffs

by Justin Ware

Northwest Airlines announced Saturday it plans to reduce its systemwide flight schedule by 20 percent.

The fourth-largest airline in the world and Minnesota’s third-largest employer, Northwest has annual revenues in excess of $11 billion and employs 53,000 people worldwide, with 22,000 employed in the Twin Cities and northern Minnesota alone.

The devastating combination of lost fares from canceled flights along with extra security costs has forced several major airlines to make cutbacks.

While Northwest would not speculate about the number of planned layoffs, Continental Airlines – a company similar in size – announced it would have to cut about 12,000 jobs.

Due to Tuesday’s terrorist attacks on New York, Washington, D.C. and Pennsylvania, reduce passenger demand and increased airport security have forced Northwest to reduce its number of flights and could lead to employee layoffs.

“We’re a business based on demand,” Kathy Peach, spokeswoman for Northwest Airlines, said Sunday.

Peach likened the situation to a restaurant that sees a decrease in customers, while the prices of materials to operate its businesses increase. Because of the nature of the business, the restaurant will order less food to meet a smaller demand.

Along with the reduction in flights, Northwest is also making temporary reductions to its work force.

“Some flight attendants have chosen to take unpaid leaves or furloughs,” Peach said.

Peach said Northwest has not yet made permanent employee cuts.

“I haven’t heard anything from the airline (about possible cuts) yet,” said Eric Gitzlaff, a University senior microbiology major who works for Mesaba airlines, a subsidiary of Northwest.

“We’re not as busy as we were (before the attacks),” Gitzlaff said. “We’re overstaffed for the work we have right now. They might have to cut back.”

In a Friday interview with CNBC, Continental Chairman Gordon Bethune said his airline is losing $30 million a day, while the airline industry as a whole is losing $400 million a day.

Bethune said airlines will need $12.5 billion in aid to survive the next 90 days.

Peach said she was unaware of any raising or lowering of travel rates, but she said any reductions could be a result of low demand for passenger travel.

The Northwest rate for a round-trip ticket to Los Angeles, as of Sunday, was $211 for most flights. Northwest is unable to speculate on future rates.

Justin Ware welcomes comments at [email protected]