The airline industry had its hand out to the government in Washington yesterday – while the other hand was furiously slashing jobs.
After the bell yesterday American Airlines announced it is firing at least 20,000 workers to save money. The cuts will cover American, American Eagle and TWA.
Delta boss Leo Mullin announced Delta will need to lay off staff soon. He said the airlines need $5 billion in cash right away and $12.5 billion in loan guarantees to keep the industry aloft.
Last night an administration official said that President Bush will ask Congress to give the nation’s beleaguered airlines $5 billion in immediate cash aid plus help with their insurance liability.
Up to 100,000 air jobs could go eventually, experts estimate.
Tiny Mesa Air said it is cutting 700 staff, and instituting 10-percent pay cuts for the next 90 days a 50 percent cut for its CEO and president, and 20 percent pay cut for senior management.
Boeing will cut up to 30,000 staff by the end of 2002.
The picture was similar in Europe, where the economic fallout seems to be delayed by a few days. Yesterday Virgin Airlines said it would cut 1,200 jobs. Meanwhile, EADS, the main shareholder of France’s Airbus – Boeing’s great rival – will hold a press conference today in which it is expected to cut delivery estimates and announce cuts.
The industry said it could lose between $18 billion and $33 billion for the year, most of it due to last week’s terrorist attacks.
Other airlines cutting staff include Northwest (10,000) and Midway, which filed bankruptcy last week, firing 1,700. Continental and US Airways have already said they too will cut thousands of jobs.
Bosses said they also need to get off the liability hook, or no one will loan them money or insurance again. In last week’s disaster, passengers are covered, but not victims on the ground, said the airlines.
Plane maker Boeing said late Tuesday night it will ax between 20,000 and 30,000 by the end of 2002 from its Commercial Airplanes division.
—-
LAYOFF-O-METER
September 19, 2001: 81,900 jobs cut (bloodbath)