The entire U.S. airline industry seems to have the low-down, no-money blues. The only thing missing is the no-good woman.
In a week of depressing earnings reports, the most striking news was Delta's plan to cut another 7,000 or 8,000 jobs. "Delta Air Lines dramatically conceded Thursday that the world has changed more than it realized in the past year," said the Atlanta Journal-Constitution. Delta also cut staff last year, said the Atlanta paper, but voluntary exit packages helped reduce the number of outright layoffs. The severance package won't be as generous this time, and workers fear they no longer have enough colleagues willing to offer their own heads.
This is expected to be the worst financial year in aviation history, the chief economist for the Air Transport Association told the Washington Post. We're still not over Sept. 11 (in more ways than one), airfares are low enough to eat profits, and no matter how low the prices fall, many Americans are too broke to go anywhere. The Wall Street Journal reported that international travel hasn't been suffering as much as domestic business travel. That makes a certain sense: Businesses are broke, too, and it's not like you can take Amtrak from New York to Paris. Perhaps those who can afford to travel aren't as scared of other countries as the State Department would like them to be.
Break out the six-string and the harmonica, because the blues aren't going away anytime soon. Winter is historically a lousy travel season, the economy is still bad, airline security and plane fuel cost more than they used to, and a war with Iraq would make it all worse. The only good news of the week came from Southwest Airlines, and it wasn't even that good. Budget airline Southwest, which has been profitable for 46 quarters in a row, was still profitable last quarter. However, that profit was down 50% from the same time last year, and execs said the current quarter might break its streak. In the meantime, Southwest did bring some joy to the struggling Boeing by ordering more jets.
Bigger airlines, looking for safety in numbers, pretended Southwest didn't exist. The chairman of Continental Airlines defended its $37 million third-quarter loss by saying it wasn't as bad as the competition. That's not saying much when the competition includes American and United.
It was a good day for a new installment of Salon's column "Ask the Pilot," which explains mysteries like "What happens when you drop dry ice into an airplane toilet?" Last week, Salon's pilot/writer said, "If a pilot is furloughed or his airline goes bust ... and he takes a job with another carrier, he assumes a position at the very bottom of his new employer's list and is back to making a probationary salary." (Getting back on topic, pilots' furlough programs are separate from layoffs like Delta's.) This week, he assured outraged readers that it's really true. "I say again, there is no airline-to-airline transfer of skills or salary," he wrote. It may seem that way for laid off businesspeople and techies, too, but at least for us it's not an industry rule. - Jen Muehlbauer
Delta Will Cut 7,000 to 8,000 Jobs
http://www.accessatlanta.com/ajc/business/delta/1002/18jobcuts.html
Delta To Cut Up to 8,000 Jobs
http://www.washingtonpost.com/wp-dyn/articles/A43620-2002Oct17.html
UAL to Report $500 Million Quarterly Loss (Rocky Mountain News)
http://tinyurl.com/2285
United Struggles Past 3rd Quarter (Denver Post)
http://tinyurl.com/2283
Continental Points To Rivals As It Posts Loss
http://www.chron.com/cs/CDA/story.hts/business/1622233
Southwest Posts Rare Profit; Other Major Airlines Suffer
http://online.wsj.com/article/0,,SB1034793288128725748,00.html
(Paid subscription required.)
Southwest orders six 737s, accelerates delivery on others
http://seattlepi.nwsource.com/business/91727_airlines18.shtml
Modest Cheer For US Airlines
http://news.bbc.co.uk/2/hi/business/2336543.stm
More Boeing Layoffs Likely; Reductions Would Be 'Across the Board' (Seattle Times)
http://tinyurl.com/2281
Ask The Pilot (Salon)
http://tinyurl.com/2282
Airline's New "Fly, Goddamnit" Campaign Not Taking Off
http://www.satirewire.com/briefs/fly.shtml
