NORTHWEST to cut 1,500 jobs, reduce flights, close facilities to cut costs
Thursday, July 19th 2001, 12:00 am
By: News On 6
EAGAN, Minn. (AP) _ Northwest Airlines will cut 1,500 jobs, eliminate flights and close some facilities to reduce costs by $135 million this fiscal year, the carrier announced Thursday.
The news came as the nation's three larger carriers _ American, United and Delta _ also reported steep quarterly losses as business travel continued to sag and fuel costs remained high.
Northwest, which employs more than 55,000 people, will lay off about 500, including 130 managers. The other 1,000 cuts will come through attrition and voluntary leaves.
``The decision to reduce staff is a difficult one for us, but Northwest, like the rest of the airline industry, continues to experience the impact of a weak U.S. economy,'' said Richard Anderson, chief executive officer.
Flight schedules will be reduced between Osaka, Japan, and the following cities: Los Angeles; Seattle; Kuala Lumpur, Malaysia; and Manila, Philippines. Nonstop flights between Detroit and Rome will also be suspended over the winter.
Northwest said it also plans to close reservations centers in New York state and Hawaii and a flight attendant base in Chicago.
The cost reductions are in addition to a $209 million cost containment program announced earlier this year.
Northwest lost $55 million in the quarter ending June 30, compared with a profit of $115 million a year earlier.
Delta Air Lines, which also had to contend with a three-month strike at its Comair regional carrier unit, announced Thursday that it lost $90 million in the second quarter, compared with earnings of $460 million the year before.
The parent companies of American and United airlines had announced similar quarterly losses Wednesday.
AMR Corp. posted a loss of $507 million after a profit of $321 million a year earlier.
UAL Corp. lost $292 million, its fourth money-losing quarter in a row after more than five years without one. It made $336 million in the same period of 2000, before labor disruptions, the slowing economy and its ill-fated proposal in May 2000 to acquire US Airways.