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US: State Of The Air

US airlines poised to shed 36,000 jobs  Sep 08, 2008

NEW YORK - Airlines are contributing to the increase in unemployment, as they slash thousands of jobs to save money in the midst of higher fuel costs.

Carriers plan to cut about 36,000 jobs by the end of the year, according to the Air Transport Association, a trade group for the largest U.S. airlines.

The airlines are cutting flights _ reducing U.S. capacity about 9 percent, ATA estimates _ so they don't need as many pilots, flight attendants and baggage handlers.

On Friday, the Labor Department announced that the unemployment rate jumped to 6.1 percent in August, from 5.7 percent in July, crossing the psychological barrier of 6 percent joblessness.

The Labor Department said jobs in air transportation fell only about 3,000 in August. But many of the job cuts announced by U.S. airlines haven't taken place yet _ meaning the worst is yet to come.

AMR Corp., parent of American Airlines, the nation's largest carrier, has announced it will cut 8 percent of its work force or about 6,800 jobs. Spokesman Tim Wagner said Friday, "We are not fully there yet."

This week American sent layoff notices to 469 workers at five U.S. airports, the latest in a series of similar moves to comply with laws requiring notice to those affected by large-scale job cuts. The airline said it hopes to avoid layoffs by offering voluntary severance packages.

UAL Corp.'s United Airlines is cutting 7,000 jobs by the end of 2009, and Continental Airlines Inc. will shed 3,000 by the end of this year.

Continental spokeswoman Julie King said more than 90 percent of the positions were eliminated through voluntary leave, early retirements and job-sharing, although 140 to 180 pilots will be laid off beginning next week.

Delta Air Lines Inc. said it would shed 4,000 jobs, and Northwest Airlines Corp., which Delta is buying, plans to cut 2,500 jobs. US Airways Group Inc. has said it would trim 2,000.

The outlook for a recovery in the airline industry is compounded by a combination of high fuel costs and weakening demand that is spreading from the United States to international markets that had been strong. The sluggish economy is also taking a toll on air transport of cargo.

The Air Transport Association forecasts that U.S. airlines will lose $7 billion to $10 billion this year, although the estimate was issued before the recent decrease in oil prices, which should show up in cheaper jet fuel. David Castelveter, a spokesman for the group, said fuel prices haven't come down enough to make airlines profitable.

Some analysts believe that airlines could rebound if oil prices continue to drop and reductions in airline capacity _ about 10 percent for U.S. carriers as a whole later this year _ result in higher fares. It's tough to say whether that will reverse the job losses.

"It's too early to say when it will come back," Castelveter said. "Airlines would have to increase capacity before they start hiring again."

US airlines poised to shed 36,000 jobs

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