US Airways, Virgin, Other Airlines Laying Off Thousands Amid Recession
As economic troubles mount, US Airways check-in agents are on the chopping block, along with ramp workers and parts of the US Airways reservations staff. It was announced that 233 more workers will lose their jobs starting next month, as the airline cuts capacity.
At least 60 of the axed employees are based in the airline’s Pittsburgh hub, and the rest are spread out over 10 cities including Las Vegas, Tucson and Los Angeles.
US Airways executives said Tuesday that the reductions are necessary to compensate for cuts in flight capacity, declining worker attrition rates, and the loss of contracts with other airlines.
It should come as no surprise that many other airlines are facing similar staff reductions, as the worldwide recession has led to a steep drop in demand for air travel. Airlines have been forced to scale back their operations, sometimes by double-digit margins, and park hundreds of “downsized” jets in the California desert.
American Airlines reduced its capacity by eight percent last year, for example, and even the supposedly recession-proof Southwest Airlines was forced to reduce its schedule by 4 percent, though it has no plans for layoffs.
Last month United announced that it plans to cut 1,000 jobs in 2009, which brings the total to almost 9,000 if figures from 2008 are added to the equation. And at American, 1,500 jobs were culled in July 2008, with more possibly to come.
And foreign carriers are not faring much better.
Sir Richard Branson announced today that the UK-based Virgin Atlantic Airways will cut as many as 600 jobs over the next year, and Dublin-based Ryanair could shed as many as 800.
At SAS Group, which owns Scandinavian Airlines, 3,000 jobs will be eliminated as the company faces a 20 percent reduction in capacity, and British Airways has plans to cut 400 people and implement pay freezes.
Worldwide, air traffic has fallen at least 3 percent in the last year, and airlines are shedding jobs to offset financial losses of more than $2.5 billion. In the U.S., air traffic is predicted to decline by at least 6.6 percent in 2009 compared to 2008, leading to further declines in revenues.
Layoffs are one of a multitude of tactics that airlines are using to cut costs and boost revenue. Over much of last year dozens of airlines instituted “a la carte” pricing systems aimed at squeezing more money out of customers by charging for items such as baggage and blankets which previously were free.
Related links: MSNBC, Forbes, Bloomberg, Denver Post, Liberty (MO) Tribune, Dallas Star-Telegram
By Karen Elowitt for PeterGreenberg.com.
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