1. Archive

Northwest cuts flights, workers to combat costs

Northwest Airlines will cut 1,500 jobs, reduce its flight schedule and close some facilities to reduce costs by $135-million the rest of the year.

The moves come as Northwest posted a $55-million loss for the second quarter Thursday, joining a list of struggling carriers that includes United, American and US Airways. Delta Air Lines also reported a second-quarter loss Thursday, and while Southwest bucked the trend by logging a profit, its income fell 7.9 percent.

Northwest, the nation's fourth-largest airline, said it was acting in response to persistently high fuel costs and continued softness in business travel linked to the weak U.S. economy.

The cost reduction plan comes in addition to a $209-million cost containment program initiated this year. That program resulted in the elimination of 100 management positions.

One-third of the new job cuts at Northwest will come from layoffs. The remainder will come through attrition, voluntary leaves and freezing open positions.

Northwest president Doug Steenland said 130 layoffs will come from management, while the rest will be spread proportionally across the airline's other work groups, such as flight attendants and mechanics.

"The decision to reduce staff is a difficult one for us, but Northwest, like the rest of the airline industry, continues to experience the impact of a weak U.S. economy that has resulted in reduced business travel," said chief executive Richard Anderson.

Northwest has 10 departures and 10 arrivals a day at Tampa International Airport: five to and from Detroit, three to and from Memphis, Tenn., and two to and from Minneapolis.

More than half of the airline's 1,134 employees in Florida are in Tampa. Of those 650 Tampa employees, almost 500 are agents who work at a Northwest reservations center north of the airport.

Northwest spokeswoman Faye Proulx said she did not have any information about the impact of the cuts on the Tampa operation.

Northwest's shares rose $1.21 to $26.01.

As Northwest restructures, Delta said it lost $90-million for the second-quarter. The Atlanta carrier blamed low demand for high-priced business travel, more expensive jet fuel and a three-month strike at its Comair regional carrier unit. But the loss was not as severe as analysts had expected, and Delta said it would have turned a profit if not for the strike.

Delta's loss, equal to 76 cents per share, was alleviated by an uptick in revenue in late June. Delta earned $460-million, or $3.51 per share, in the same period of 2000.

Excluding unusual items, Delta had an operating loss of $123-million, or $1.03 per share, beating the $1.20 per share loss expected by analysts surveyed by Thomson Financial/First Call. In the same period of 2000, Delta had operating profit of $374-million, or $2.85 per share.

The airline said the Comair pilots' strike cut its second-quarter income by $195-million, or $1.59 per share. Delta, the nation's third-largest carrier, is working to resume regular operations after the 89-day pilots strike shut down Comair. The carrier also was hampered by uncertainty over a potential strike by its own 10,000 pilots. Both disputes have been settled.

Delta shares rose 90 cents to close at $45.60.

Southwest's second-quarter net income came to $175.6-million, or 22 cents a share, compared with $190.6-million, or 24 cents, a year earlier. Sales rose 6.4 percent to $1.55-billion from $1.46-billion.

The nation's largest low-fare carrier said it trimmed ticket prices even further to attract travelers. Southwest expects to earn a profit in the current quarter, although it will fall from the year-earlier level, chief executive James Parker said.

Southwest shares rose 25 cents to $19.75.

_ Times staff writer Jeff Harrington contributed to this report, which includes information from Bloomberg News.