AIRLINE NEWS
Friday, June 27, 2008
United to lay off 950 pilots, slash fleet
UNITED Airlines, the only US carrier offering non-stop flights between Australia and the US mainland, will lay off 950 pilots and reduce its fleet by 100 aircraft as the airline industry reels from the effect of high fuel prices.
The decision by a major carrier to lay off about 15 per cent of its pilots comes as US aviation experts, including former American Airlines chief Bob Crandall, warn that at least one big airline may go under.
It also comes as a US House Committee is due to discuss a report by the Business Travel Coalition warning that airline liquidations could cripple the US economy, costing between 30,000 and 75,000 direct jobs and resulting in payroll losses of $US2.3-6.7 billion ($2.4-7 billion).
The report predicts that losses would ripple through communities, endanger businesses that depend on airlines, devastate tourism and affect businesses that rely on just-in-time freight.
It also forecasts a decline in business activity because of disruption to travel, falling tax revenues and increased government outlays in areas such as unemployment benefits.
Another study, by Airline Forecasts, says oil prices of $US130-140 a barrel could result in the loss of 75,000 to 80,000 jobs, including about 11,500 pilots.
United's announcement this week came on top of a previous announcement that it would slash fleet operations and up to 1100 salaried and management jobs to offset higher fuel bills and a weakening US economy. Those lay-offs, from a workforce of about 55,000, were in addition to 500 already announced.
The airline plans to slash domestic capacity by 14 per cent by the fourth quarter of this year and total capacity by 8 per cent.
Over 2008-09, cumulative mainline domestic capacity will be reduced by 17-18 per cent and consolidated capacity by 9-10 per cent.
This involves retiring an additional 70 older aircraft, on top of 30 already targeted, and shrinking the fleet to about 360 planes by next year.
The retirements involve all 94 of its Boeing 737s and six Boeing 747s.
"As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult, but necessary step to reduce the number of people we have to run our business," the airline said.
In a message to the aviators, Keith Rimer, the airline's chief pilot, said that because of the number of pilots on military and personal leave, furlough notices would be sent to more than 1400 of the airline's least senior pilots in order to cut the active roster by 950.
The carrier was talking to unions about the lay-offs and said affected pilots would be notified in mid-July. The lay-offs are due to start in September.
It also announced a plan for global co-operation with Continental Airlines that would see the latter join the giant Star Alliance and the two carriers link their networks and services.
The airlines said last week the move would create revenue opportunities, but noted it would also result in cost savings and "efficiencies".
A United spokesman in Australia said the cutbacks were unlikely to affect Australian services as most of the aircraft being grounded were Boeing 737s.
Earlier this week in Sydney, the airline unveiled new business and first-class seats it was introducing across its fleet of Boeing 747s, 767s and 777s. But a spokesman said there was no time line for that at this stage.
However, the roadshow coincides with the introduction on the trans-Pacific of new Boeing 777s by Virgin subsidiary V Australia and the arrival on the route of Qantas's flagship A380s.
The new United business cabins will feature the kind of lie-flat sleeper seats and video-on-demand systems that have been available on other airlines for several years.
Other major airlines also have announced plans in recent weeks to shrink their operations, ground older aircraft, defer deliveries of new planes on order and cut jobs.
Delta Air Lines shed 4000 jobs through voluntary buyouts.
American Airlines, Continental Airlines and US Airways Group also have announced plans for reducing their head counts and fleets.
Source: theaustralian.news.com.au
The decision by a major carrier to lay off about 15 per cent of its pilots comes as US aviation experts, including former American Airlines chief Bob Crandall, warn that at least one big airline may go under.
It also comes as a US House Committee is due to discuss a report by the Business Travel Coalition warning that airline liquidations could cripple the US economy, costing between 30,000 and 75,000 direct jobs and resulting in payroll losses of $US2.3-6.7 billion ($2.4-7 billion).
The report predicts that losses would ripple through communities, endanger businesses that depend on airlines, devastate tourism and affect businesses that rely on just-in-time freight.
It also forecasts a decline in business activity because of disruption to travel, falling tax revenues and increased government outlays in areas such as unemployment benefits.
Another study, by Airline Forecasts, says oil prices of $US130-140 a barrel could result in the loss of 75,000 to 80,000 jobs, including about 11,500 pilots.
United's announcement this week came on top of a previous announcement that it would slash fleet operations and up to 1100 salaried and management jobs to offset higher fuel bills and a weakening US economy. Those lay-offs, from a workforce of about 55,000, were in addition to 500 already announced.
The airline plans to slash domestic capacity by 14 per cent by the fourth quarter of this year and total capacity by 8 per cent.
Over 2008-09, cumulative mainline domestic capacity will be reduced by 17-18 per cent and consolidated capacity by 9-10 per cent.
This involves retiring an additional 70 older aircraft, on top of 30 already targeted, and shrinking the fleet to about 360 planes by next year.
The retirements involve all 94 of its Boeing 737s and six Boeing 747s.
"As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult, but necessary step to reduce the number of people we have to run our business," the airline said.
In a message to the aviators, Keith Rimer, the airline's chief pilot, said that because of the number of pilots on military and personal leave, furlough notices would be sent to more than 1400 of the airline's least senior pilots in order to cut the active roster by 950.
The carrier was talking to unions about the lay-offs and said affected pilots would be notified in mid-July. The lay-offs are due to start in September.
It also announced a plan for global co-operation with Continental Airlines that would see the latter join the giant Star Alliance and the two carriers link their networks and services.
The airlines said last week the move would create revenue opportunities, but noted it would also result in cost savings and "efficiencies".
A United spokesman in Australia said the cutbacks were unlikely to affect Australian services as most of the aircraft being grounded were Boeing 737s.
Earlier this week in Sydney, the airline unveiled new business and first-class seats it was introducing across its fleet of Boeing 747s, 767s and 777s. But a spokesman said there was no time line for that at this stage.
However, the roadshow coincides with the introduction on the trans-Pacific of new Boeing 777s by Virgin subsidiary V Australia and the arrival on the route of Qantas's flagship A380s.
The new United business cabins will feature the kind of lie-flat sleeper seats and video-on-demand systems that have been available on other airlines for several years.
Other major airlines also have announced plans in recent weeks to shrink their operations, ground older aircraft, defer deliveries of new planes on order and cut jobs.
Delta Air Lines shed 4000 jobs through voluntary buyouts.
American Airlines, Continental Airlines and US Airways Group also have announced plans for reducing their head counts and fleets.
Source: theaustralian.news.com.au
Labels: United Airlines
