- The Washington Times - Saturday, March 22, 2003

MINNEAPOLIS (AP) Northwest Airlines announced plans yesterday to cut 4,900 jobs and reduce its flight schedule by 12 percent, while United Airlines said it will trim its schedule by about 8 percent and lay off an undetermined number of workers.
Both cited the effect of the war in Iraq.
Northwest said it would use layoffs, attrition, voluntary leaves and keep open positions unfilled to make the job cuts. A relief package including pay, medical coverage and flight privileges will be offered to the affected employees, the airline said.
The cuts include 2,000 mechanics, 1,400 flight attendants, 630 baggage handlers and customer-service agents, 250 pilots, 125 cleaners, 300 management and 150 clerical positions, and 40 stock clerks, said Paul Volker, legislative officer for the Aircraft Mechanics Fraternal Association Local 33.
Northwest, which plans to idle 20 planes, already has laid off about 12,000 employees because of the slump in the airline industry.
"Clearly, the last two years have been a difficult and painful period for our employees," Chief Executive Richard Anderson said. "Due to the weak demand for business travel, which emerged in March 2001, the subsequent impact of the terrorist attacks on the United States in September of that year, and now, armed conflict with Iraq, we have been forced to reduce our work force by some 17,000 employee positions."
Mr. Volker said Northwest officials told his union's leaders earlier yesterday that the airline intended to invoke the "force majeure" clauses in its labor contracts. That is the legal term for uncontrollable events that release parties from their contractual obligations. That would free Northwest from union-negotiated agreements related to seniority and work rules stipulations that can make it difficult to cut jobs.
Analysts said earlier this week that the war could give airlines reason to cut costs via the "force majeure" clause, which they used after the September 11 terrorist attacks.
Most of the major carriers are suffering under excessive labor expenses, poor economic conditions and a decrease in spending by business travelers.
United, the world's second-largest airline, said it will eliminate 104 U.S. flights as of April 1 and 20 international flights effective April 6. It said it would reduce service to Amsterdam; Frankfurt, Germany; London; Tokyo; Paris; Taipei, Taiwan; and Brussels.
The Chicago airline, which operates about 1,700 daily flights, will reduce that number to 1,574, not counting the 1,478 operated by its regional partners as United Express flights.
While the company said it had not made final the number of employees being put on temporary leave, its unions disclosed a day earlier that 2,300 flight attendants and 1,100 Indianapolis-based mechanics would be among those laid off.
"We saw a drop in future bookings as a result of the threat of war, and we expect this to continue with the onset of war itself," said Greg Taylor, a United senior vice president.
United had warned its employees the cuts would be coming because of both the travel slump resulting from Iraqi war jitters in recent weeks and the strict financial benchmarks it must meet to retain its bankruptcy financing.
The airline, which filed for Chapter 11 bankruptcy protection Dec. 9, lost a record $3.2 billion last year and has pegged its operating loss for the first three months of 2003 at $870 million.
"We are at a point where we must curtail or delay all work not critical to the company's safe operation or successful emergence from bankruptcy," said Senior Vice President Sara Fields.
Earlier this week, Continental Airlines said it will cut its work force by about 1,200 employees by the end of the year to save $500 million. More layoffs are planned if war with Iraq is prolonged and air travel remains soft.
American Airlines, the world's largest carrier, said Thursday it will cut international flights by 6 percent in April to meet a downturn in travel bookings because of the war in Iraq and could make additional reductions if traffic remains slow.
Since the September 11 attacks, major airlines have laid off roughly 100,000 employees and industrywide capacity is down about 14 percent from two years ago.
Passenger traffic and ticket prices also have fallen sharply, resulting in bankruptcy filings by US Airways, United Airlines, Hawaiian Airlines and industrywide losses of $9 billion in 2002.

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