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Northwest cuts 10,000 jobs
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September 21, 2001: 12:21 p.m. ET
Carrier becomes latest airline to cut staff; House awaits airline aid package
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NEW YORK (CNNfn) - Northwest Airlines said Friday it will cut 10,000 jobs and reduce scheduled service by 20 percent, becoming the latest major carrier to announce sharp cutbacks after last week's terrorist attacks.
The nation's No. 4 airline said 9,000 contract and 1,000 management employees will be affected. The cuts bring the total announced or estimated layoffs in the industry since last week's terrorist attack to nearly 100,000.
"This is a very painful decision," said Richard Anderson, the CEO of Northwest (NWAC: down $0.68 to $10.33, Research, Estimates). "However, the current operating environment dictates that we reduce our flying schedule significantly, which in turn requires a significant reduction in our staffing levels and payroll."
Among the nation's major airlines only Delta Air Lines (DAL: up $0.65 to $22.50, Research, Estimates) and Southwest Airlines (LUV: up $0.32 to $13.15, Research, Estimates) have not announced deep cuts in staffing, though Delta told employees to expect layoff notices early next week as it reduces operations 15-to-20 percent.
Southwest Airlines, the nation's most profitable carrier which prides itself on never having to lay off employees, is also eyeing deep cuts in its schedule of flights, a company spokeswoman said Friday. But she said the carrier still hopes to avoid layoffs even with a reduced schedule.
The move by Eagan, Minn.-based Northwest comes after Congress and White House officials agreed on an aid package for the airlines Friday morning. The immediate package includes $5 billion in cash and $10 billion in loan guarantees. The bill could be on the House floor Friday and the Senate floor soon after.
U.S. airlines were having severe problems before the terrorist attack, and Northwest had already set plans to cut 1,500 nonunion staff positions earlier this year. But most of the carriers had avoided layoffs before the attack despite projections at that time that the industry was on course to lose $3 billion in 2001. Airline executives told Congress this week they expect to lose $4.7 billion from the date of the attack until the end of this month.
Click here for a look at the airlines' impact on the U.S. economy.
Even with the staff cuts and aid package, the airlines won't be able to make it at current weak passenger levels, said Raymond Neidl, analyst with ABN Amro.
"We need to see how quick traffic levels come back," he said.
The two largest job cuts in the industry have come from the two largest companies, No. 1 AMR Corp. (AMR: down $0.47 to $17.98, Research, Estimates), owner of both American Airlines and Trans World Airlines, and No. 2 UAL Corp. (UAL: up $0.02 to $17.25, Research, Estimates), owner of United Airlines. Each has announced 20,000 job cuts.
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No. 5 carrier Continental Airlines (CAL: up $0.04 to $13.99, Research, Estimates), which together with Southwest were the only profitable carriers in the industry before the attack, started the rash of layoffs when it announced a job cut of 12,000 last Saturday. 
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Delta president tells employees to expect layoffs - Sept. 20, 2001
Airline losses could ground U.S. economy - Sept. 20, 2001
American parent and United to cut 20,000 jobs - Sept. 19, 2001
Boeing to cut 20,000-30,000 jobs - Sept. 19, 2001
Airline executives warn of bankrupties - Sept. 19, 2001
Airlines make bailout plea to feds - Sept. 18, 2001
Airline stocks see steep selloff - Sept. 17, 2001
Continental slashes staff, flights - Sept. 15, 2001
Airlines' cash will last only 30 days - Sept. 14, 2001
Skies safe from layoffs despite losses - Aug. 24, 2001
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Northwest Airlines
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