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Letters from America - September 19, 2001

By - Wed, 19th Sep 2001

Letter Issue 10

Airline industry in crisis

Job cuts mount in wake of attacks

Boeing confirms massive layoffs as airlines shrink schedules,and staff

An American flag flies at half-staff Monday outside a Boeing test center building in Seattle.

A week after the devastating terrorist attacks on New York and Washington, the economic impact was being measured in tens of thousands of job losses across the country. Late Tuesday, Boeing Co. said it would eliminate as many as 30,000 jobs from its commercial aircraft division, while the nation’s two largest air carriers, United Airlines and American Airlines, were expected to announce large layoffs in response to heavy cancellations, rising costs and an anticipated sharp reduction in air travel.

BOEING WILL LAY OFF 20 percent to 30 percent of its commercial airline work force of about 93,000 — mostly located in the Seattle area — as a result of the terrorist attacks, the company confirmed Tuesday night. Alan Mulally, president and chief executive of Boeing Commercial Airplanes, told reporters the company would begin handing out pink slips within three weeks, with layoffs to begin within the next two months.
“It is critical that we take these necessary steps now to size the commercial airplanes business to support the difficult and uncertain environment faced by our airline customers,” Mulally said in a statement.
Meanwhile, Boeing’s largest customers were scaling back.
American Airlines employees could learn as early as Wednesday whether they still have jobs, and as many as 20,000 jobs at United Airlines, about 20 percent of the carrier’s workforce, are believed to be in jeopardy.

September 19, 2001 — The crisis in the aviation industry has struck Boeing, which is laying off tens of thousands of employees. NBC’s Robert Hager reports.

Over the weekend, United said it would cuts its scheduled flights by 20 percent, joining American and nearly all U.S. carriers that have made similar announcements.

The New York Stock exchange re-opens in the wake of tragedy.

Speaking on condition of anonymity, an American Airlines official told The Associated Press the company would announce layoffs this week but the number of layoffs was unclear.
Unions representing pilots, flight attendants and mechanics have been plotting strategy for protecting as many jobs as possible, convinced that layoffs are coming.
“We’re expecting it, we just don’t know how it’s going to affect flight attendants. We’re not in denial,” said Leslie Mayo, a spokeswoman for the Association of Professional Flight Attendants, which has about 23,000 members at American.
Leaders of the Allied Pilots Association, which represents American’s 11,000 pilots, have talked to airline officials about how furlough provisions of their contract would be applied. The union did not respond to calls for comment.
American, and its commuter line, American Eagle, have about 100,000 employees.
Houston-based Continental said Saturday it would lay off 12,000 of its 56,000 employees, and US Air said on Monday it was cutting 11,000 jobs, saying it has less the $1.2 billion of cash on hand to deal with the industry-wide downturn.
A spokeswoman for Dallas-based Southwest Airlines said the low-fare carrier has resumed a nearly normal schedule of 2,700 daily flights and was not considering layoffs.
The overall downturn in travel, following last Tuesday’s attacks, when hijackers comandeered and crashed four U.S. commercial jetliners, was expected to translated into sharply lower orders for Boeing. Mullally, the president of the company’s commerical airplane division, said layoffs will be made across the board, across the country and across all airplane models.


The White House and Congress are considering a federal aid package for the airline industry to help it recover from last week’s attacks.
The industry has asked for $17.5 billion in loans and credits, down from their original request of $24 billion.
Though the White House and congressional leaders suggested a multibillion-dollar package was on the way, they weren’t offering a final dollar figure or timetable for debate.
The Bush administration could propose an aid package next week, Transportation Secretary Norman Mineta said. The House may move forward this week, when it returns from a recess for the Jewish holiday.


The Associated Press and Reuters contributed to this report.
Till next Time... Jim White ...

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