US Airways to lay off 800 in area

THE BALTIMORE SUN

As defiant union leaders vowed to fight job cuts, US Airways Group Inc. began to notify nearly 800 of its Baltimore-area employees yesterday that they would be laid off as part of the airline's attempts to eliminate 11,000 jobs in the wake of terrorist attacks in New York and Washington.

Details of US Airways' cuts came as news of more airline layoffs were announced in the United States and Canada, bringing the total number of direct U.S. airline jobs lost since Sept. 11 to about 93,000.

Delta Air Lines Inc. said it will trim 13,000 jobs, or 16 percent of its work force, making it the last of the six largest airlines to announce cuts. Air Canada, that country's largest airline and the 10th-largest in the world, said it will eliminate 5,000 jobs, or roughly 12.5 percent of its work force.

In a related development, LSG Sky Chefs, the largest U.S. airline caterer, said it would lay off up to 4,800 employees, or 30 percent of its U.S. work force, because of flight and food service cutbacks by airlines.

Analysts said the industrywide pullback will hit Baltimore-Washington International Airport especially hard as US Airways, the airport's second-biggest user, trims staff and moves to eliminate its entire MetroJet fleet in order to cut costs.

Before Sept. 11, MetroJet accounted for 49 of the airline's 75 mainline jet flights at BWI, and the staffing changes revealed by union leaders and other sources yesterday will eliminate more than a quarter of the airline's Baltimore employee base.

"We certainly don't want to have to do this again," US Airways executives said in a memo to employees regarding the 11,000 layoffs. "However, our situation is precarious. Unless passenger traffic returns and US Airways can regain its financial footing, we may be forced to consider further reductions."

Industry officials estimate that cuts announced by airlines so far account for 10 percent to 15 percent of the industry's work force. More could be on the way if passengers don't return to the skies soon, sources said.

"Right now, airline schedules have been cut back by 20 percent, so this head-count cut is not proportionate to the reduction in flying," said David Swierenga, chief economist for the Air Transport Association, an industry trade group representing airlines.

Airline union leaders have called the layoffs "draconian," and some have accused Arlington, Va.-based US Airways and other airlines of taking advantage of a national emergency to implement downsizing plans that predate Sept. 11.

"We're outright saying this is an act of corporate terror," said Roy Freundlich, a spokesman for the US Airways unit of the Air Line Pilots Association. "We believe this is just about pursuing other objectives. It's very opportunistic."

Before the Sept. 11 attacks, US Airways was struggling to put into effect a restructuring plan that called for more regional jets and other route changes that were not favored by the pilots and other union groups. The plans were detailed after a $12.3 billion merger with UAL Corp.'s United Airlines fell through, leaving US Airways vulnerable to low-fare competitors that have been eating its market share.

"These [recent cuts] are pieces they were trying to do beforehand to package this thing for sale to another airline," Freundlich said.

US Airways officials declined to comment on the matter, but Chairman Stephen M. Wolf has publicly said that the job cuts are essential if the airline is to survive the current crisis affecting the industry.

'Desperately needed'

Airline analysts said both arguments are likely true.

"These are probably cuts they've contemplated for a long time," said Darryl Jenkins, director of the Aviation Institute at George Washington University. "For what it's worth, though, these were also cuts that were desperately needed."

Jenkins and other analysts have given US Airways limited chances of recovery, despite a federal bailout that will likely net the airline $330 million in cash to mitigate losses from the terrorist attacks.

In anticipation of more cuts, employee unions are pushing in Congress for a relief package to aid displaced airline workers. But Congress has been mixed in its support. The $3.75 billion package would give laid-off workers extended unemployment and health benefits, as well as money for retraining, said Jeff Zack, a spokesman for the Association of Flight Attendants.

"It's just a matter of whether at the end of the day those who are inclined to give the CEOs their bailout are inclined to give the workers some relief at the same time," Zack said.

At US Airways, an estimated 1,350 US Airways pilots are expected to be laid off in coming weeks, including about 500 in Baltimore, the pilots union said. Up to 300 Baltimore-area flight attendants also are expected to lose their jobs, though exact numbers were unavailable.

Both the pilots and the flight attendants contend the furloughs violate their union contracts. But US Airways and other airlines said they are implementing the layoffs under standard emergency provisions contained in the contracts. The unions plan to fight the furloughs by seeking federal arbitration in the dispute.

US Airways said yesterday that it will provide standard severance benefits to laid-off employees even though the emergency, or "force majeure," provisions in their contracts do not require such protections. The salary and medical benefits vary by employee group. The airline also said it will provide career assistance for laid-off employees.

BWI business leaders said the loss of US Airways employees will be felt in the local economy, but there is optimism that traffic at the region's busiest airport will return.

"Everybody has felt it financially and emotionally over the last couple of weeks," said Neil Shpritz, executive director of the BWI Business Partnership, which represents businesses surrounding BWI. "It's been a hell of a hit, but on the other hand, there's still a lot of activity out there."

State transportation officials say traffic is slowly picking up, with business in the airport's parking lots approaching normal levels over the weekend. And airlines are still requesting more gates, which were in short supply at the fast-growing airport before Sept. 11. The airport launched a $1.8 billion expansion plan last summer to keep up with demand. So far, there are no plans to scale back that expansion.

Most requests stand

"We still have most of those requests for gates from prior to Sept. 11," said Beverley Swaim-Staley, acting executive director of the Maryland Aviation Administration.

Airport officials said the loss of US Airways' MetroJet service will be balanced by growth from other airlines once traffic resumes. Southwest Airlines, the biggest user at BWI, is the only major U.S. airline that has not announced layoffs. A spokeswoman for the airline said there are no plans to lay off employees or scale back the airline's flights, which include 127 daily departures at BWI.

"We can't continue like this indefinitely; that's a certainty," said Christine Turneabe Connelly, a spokeswoman for Southwest.

"We do have a contingency plan, but we are doing everything we can right now as individual employees and as a company to save costs everywhere we can to protect our financial health and, therefore, prevent reducing our schedule or, ultimately, furloughs," Connelly said.

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