Major airlines in the US to cut more flights, jobs in 2009

Major airlines based in the United States are planning to cut more flights and jobs in 2009 in view of the falling travel demand.

Though the United States-based airlines have now benefited from by a sudden drop in the prices of jet fuel, they had already cut capacity in the autumn of 2008 with a view to reducing costs, and had jacked up fares.

“But the fall in traffic was even faster than the supply of seats, especially since the stock market went into a nosedive,” a spokesman of Delta Air Lines, based and headquartered in Atlanta, Georgia, the United States, was quoted as saying.

Delta has hinted at more job losses in an attempt to cope with deepening recession.

Delta Air Lines, the world’s largest airline, said it will reduce overall capacity by another 6% to 8% in 2009. Delta and its Northwest Airlines unit will together cut capacity in the United States by 8% to 10%.

In a memo to employees, Delta Air Lines’ CEO Richard Anderson and president Ed Bastian said: “We are analysing the impact of reduced flying on jobs and, as in the past, we will offer voluntary programmes to adjust staffing needs.” However, they did not elaborate.

Earlier in 2008, Delta had sharply cut capacity in the United States, and had said at that time it would do away with about 4,000 jobs. Delta Air Lines, including Northwest Airlines, has 75,000 employees.

Gary Kelly, chairman and chief executive of Southwest Airlines Company, said in a statement: “October 2008 was a bang-up month, almost unexplainably strong. The trends changed in November 2008.”

“Even Southwest Airlines,” Gary Kelly added, “which saw the pullback of other airlines as an opportunity for growth, is cutting capacity. Southwest Airlines would drop unprofitable routes and trim first-quarter capacity by 4% to 5%, though that is slightly less than the airline’s previous goal of a 5% to 6% reduction.”

American Airlines, a wholly owned subsidiary of the AMR Corporation and headquartered in Fort Worth, Texas, the United States, and its feeder carrier American Eagle plan to cut capacity by 6% in 2009. “There would be a reduction of 8.5% in US flying by American Airlines itself,” Beverly Goulet, treasurer of AMR Corporation, said.

Continental Airlines, based in Houston, Texas, the United States, said it was “seeing weaker demand for first-and business-class seats on international flights, which had been a relatively strong part of the business.”

United Airlines, a subsidiary of UAL Corporation with corporate offices in Chicago, the United States, said the company would raise about $300 million in cash during the fourth quarter of 2008. The company also plans to sell up to $200 million in new stock partly to pay down debt.

Kathryn Mikells, chief financial officer of UAL Corporation, was quoted by the media as saying: “Traffic is clearly down across the industry, and United Airlines is not considering further capacity cuts at this time. The No. 3 US airline is paring capacity by 11% this quarter compared with a year ago. At this point, we are very comfortable with the capacity cuts we have put into place.”

Alaska Air Group said it might sell as many as 4 Boeing jets as it moves to reduce capacity at its Alaska Airlines unit by about 8% in 2009.

In Canada, Air Canada, the country’s largest airline, is cutting 2,000 jobs and reducing capacity by 7% and also reducing flight attendant bases in Winnipeg and Halifax as part of a streamlining plan.