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Northwest joins the club

Northwest Airlines cutting 2,500 frontline and management jobs

Jul 09, 2008

MINNEAPOLIS - Northwest Airlines Corp. said on Wednesday it will cut 2,500 jobs because of high oil prices, and will begin charging $15 to check a single piece of luggage and as much as $100 to redeem a frequent-flier award ticket.

The airline said it expects the new fees to add $250 million to $300 million a year in revenue.

Northwest said the job cuts -- which represent about 8.3 percent of its work force -- will include front-line and management workers. It said it will start with voluntary departures and leaving open jobs unfilled before moving to furloughs to reach the 2,500 total.

Northwest had said previously it would have fewer workers after it cuts 8.5 percent to 9.5 percent of mainline flying in the fourth quarter of this year. It has said overall capacity would shrink 3 percent to 4 percent because it is adding regional seats. As of the end of 2007, Northwest employed about 30,000 people.

President and Chief Executive Doug Steenland said Northwest's fuel costs have more than doubled in the past year.

"These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying," Steenland said in a written statement.

Northwest also said it would begin charging $15 for the first checked bag, matching a fee announced earlier this year by US Airways, American Airlines, and United Airlines. Northwest's new fee applies to tickets sold after Thursday for travel starting Aug. 28 in the U.S. or to Canada.

Northwest also announced a fee for issuing frequent-flier tickets beginning Sept. 15. It said it will charge $25 for domestic tickets, $50 for trans-Atlantic tickets and $100 for trans-Pacific tickets. Steenland called the service fee temporary.

"As fuel comes down, we will re-visit this decision," he said.

At Delta Air Lines Inc., which is buying Northwest, a spokeswoman said record high fuel costs are causing the Atlanta-based carrier to look at everything. "However, we have made no changes to the service we offer to customers for a complimentary first checked bag," spokeswoman Betsy Talton said.

Last month Delta announced a surcharge for redeeming frequent flier tickets $25 for tickets in the U.S. and Canada and $50 for international.

American Airlines was the first major U.S. carrier to announce a fee on first checked bags. Spokesman Tim Smith said Northwest's moves "clearly show they are facing the same extreme challenges all airlines are dealing with these days."

Executives of American parent AMR Corp. said last week they expect to cut 8 percent of the work force, or about 6,800 jobs.

Continental Airlines Inc., which has announced 3,000 job cuts but doesn't charge for checking a first bag, declined to comment on Northwest's actions.

Northwest shares fell 76 cents, or 10.2 percent, to $6.71 in afternoon trading.


Northwest Airlines cutting 2,500 frontline and management jobs

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