NWA to pare its fleet, cut up to 900 jobs
uhhhgggg. Such an industry we live/work in. Why lord, Oh why lord, me??
Northwest Airlines, facing a lethal combination of persistently high fuel prices and stubbornly low fares, will reduce its fleet by 30 airplanes in 2005 and slash up to 900 high-paying mechanics jobs from its Minnesota payroll.
For airline workers, passengers and investors, the retiring of planes and a new round of job cuts are fresh reminders that the steep, four-year decline in the fortunes of large airlines shows no signs of lifting, even as Northwest and other airline executives win wage reductions from some or all of their employees.
"Just when you think you've hit bottom, they pull it out from underneath you again," said Jeff Mathews, contract coordinator with the mechanics union, the Aircraft Mechanics Fraternal Association (AMFA).
Northwest had 451 planes in its fleet at the end of 2004. Most, if not all, of the 30 that will be parked are DC-9s, which have an average age of 33.8 years and seat between 78 and 125 passengers. On Monday, Northwest said it would freeze the number of domestic seat miles it will fly this year at 2004 levels.
It blamed a glut of seats in the U.S. aviation market.
It's unclear how Twin Cities passengers will be affected by Northwest's decision to take some planes out of service, but a company spokesman said the airline expects to reduce the frequency of flights on some routes.
The Eagan-based carrier said Wednesday that it will shut down a DC-9 heavy-maintenance check line in the Twin Cities and not bring back six planes that had been scheduled to fly this year. The immediate impact: 130 mechanic jobs will be cut. Notices will go out in the next couple of weeks, and mechanics could use their seniority to take jobs elsewhere in the Northwest system -- displacing less senior workers in the process -- or simply accept a layoff and leave the Northwest payroll.
Another dozen AMFA members who work in a Twin Cities composite shop also will be given notices because they support the heavy maintenance work.
Before the 2001 terrorist attacks, AMFA represented about 5,300 Northwest workers in the Twin Cities. That number has fallen to about 3,150, according to Ted Ludwig, president of AMFA Local 33 in Bloomington.
"I was here when we had the Iraq war layoffs when 1,683 guys got their pink slips in one day," Ludwig said. "This is just something that we've grown accustomed to and we will deal with it one day at a time as it comes."
Northwest said Wednesday that it will take another 24 planes out of service, but it declined to give a timetable for those changes.
"The first reduction will take place in June while additional aircraft will be phased out later this year," the Northwest pilots union said in a memo to pilots on Wednesday night.
"Because a large number of DC-9s are owned rather than leased, Northwest indicated it can realize a net savings by removing these aircraft from routes that are identified as unprofitable," the pilots union said.
Taking two dozen planes out of service will mean cutting an extra 700 to 800 mechanic jobs in the Twin Cities, where workers take planes apart, inspect them for cracks and wear, and rebuild them over the course of weeks. By eliminating so-called heavy maintenance work on its DC-9s, Northwest said it will close two of its maintenance lines operated by an outside vendor in Texas.
The worst-case scenario for the mechanics union is 930 job cuts this year.
But three other large Northwest unions -- the pilots, flight attendants and ground workers -- are not expecting job cuts.
Management does not plan to furlough any more Northwest pilots this year, according to the Northwest branch of the Air Line Pilots Association (ALPA). But the company also does not expect to call more pilots back to work, and about 500 are still on furlough.
Bob Krabbe, an official with the Professional Flight Attendants Association (PFAA), said Northwest is not expected to furlough more flight attendants. Instead, he said, any changes in staffing levels will be managed through voluntary leaves.
Union leader Steve Dunn said his union, the International Association of Machinists and Aerospace Workers (IAM), has been notified that job cuts for IAM ground workers are not planned.
However, the flight attendants, ground workers and mechanics unions all are in mediated contract negotiations with Northwest. Management is seeking at least $950 million per year in labor savings from its workers, and CEO Doug Steenland has said that target could go higher.
Some mechanics believe Northwest is trying to shift more of its domestic flying to regional partners such as Pinnacle Airlines, where pay levels are lower and planes are newer, and thus require less maintenance.
While the number of seat miles flown by Northwest pilots will be flat this year, Northwest projected that its flight capacity for regional carriers will increase by 32 to 34 percent.
"We are moving into the busiest part of the travel season. I don't know why we'd be reducing capacity," Ludwig said. "I believe they are moving these flights over to Pinnacle."
Northwest said it has not made a policy decision to shift a major portion of its flying to Pinnacle.
"The reduction in Northwest domestic capacity will currently not be offset by regional jet flying," Northwest spokesman Thomas Becher said.
Joel Denney, an airline analyst at Piper Jaffray & Co., said industry insiders have been waiting for some airlines to go out of business because of massive losses that have been posted over the past four years.
Instead, United Airlines, the nation's second-biggest carrier, and US Airways continue to languish in bankruptcy court. Delta Air Lines is once again warning that it might have to file for bankruptcy protection and Continental Airlines announced Tuesday that its employees must approve concessionary contracts by March 30 or it will insist on even deeper labor cuts.
Last year, Northwest lost $878 million, and it has lost about $2.5 billion on its operations over the past four years. Federal aid and the sale of some major assets helped lower its total net loss.
"You've got more capacity than the market can handle, which is why you are seeing Northwest holding back," Denney said. The airline is attempting to reduce losses and boost fares, he said. With fuel prices remaining at record levels, Denney said, there are no signs of significant improvement in the airline industry.
AMFA leaders had been fearful that Northwest would phase out heavy maintenance jobs in the Twin Cities, because the airline plans to tear down an airport hangar to make way for more gates.
Ludwig and other union members have urged members of the Minnesota Legislature and Metropolitan Airports Commission (MAC) to block the further loss of mechanic jobs.
But the MAC and Gov. Tim Pawlenty have shown strong support for Northwest's airport expansion plan, and the Legislature has not inserted itself into the airline's labor-management relations.
