US airline industry sees job growth, but pain remains
03-19-2006, 08:22 PM
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US airline industry sees job growth, but pain remains
US airline industry sees job growth, but pain remains
Sun Mar 19, 2006 12:41 PM ET
By Kyle Peterson
CHICAGO, March 19 (Reuters) - Employment prospects for airline workers are better now than at any time since the Sept. 11 attacks, but the slight uptick in demand may not create jobs for all out-of-work airline professionals or lift the industry's decimated wage structure.
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Large carriers such as UAL Corp.'s (UAUA.O: Quote, Profile, Research) United Airlines, US Airways (LCC.N: Quote, Profile, Research) and Continental Airlines (CAL.N: Quote, Profile, Research) have been adding staff since last year as competition on some routes has subsided and cost cuts have narrowed losses.
Still, struggling carriers continue to slash labor costs. Bankrupt Delta Air Lines (DALRQ.PK: Quote, Profile, Research), for example, is laying off thousands as part of its restructuring. Experts say joblessness abounds and compensation is down significantly as airlines struggle to keep costs in check.
"We're in a hiring situation, not in a furlough situation, but I don't think that tells the whole story," said Sara Nelson Dela Cruz, spokeswoman for the Association of Flight Attendants (AFA), which represents flight attendants at United and some smaller carriers.
"It doesn't tell the story of the thousands of people who were laid off after September 11," she said. "And it doesn't tell the story of the thousands of people who had to leave because they could no longer afford to stay in this industry."
Dela Cruz said that first-year flight attendants at United make about $17,000 a year, down from $21,000 before the attacks.
Government data show that the number of workers at "major" airlines -- as classified by the Transportation Department -- fell 21.6 percent from 2000 to 2004. Airlines added about 2,800 jobs in 2005, the first increase in jobs since 2000.
The airline industry has been hammered in recent years by soaring fuel prices and low-fare competition, sending major carriers like Delta and Northwest Airlines (NWACQ.PK: Quote, Profile, Research) into bankruptcy. But even before that, jobs began to rapidly disappear after the Sept. 11, 2001, attacks.
HIRING AGAIN
Some airlines, which have managed to get their labor costs down in the last few years, find themselves on surer footing and are regrowing their work forces.
Continental spokesman Ned Walker said, "We've called back all of our employees and have been in an aggressive hiring mode to accommodate previously announced growth as well as attrition."
He said the airline, No. 4 in the United States in terms of revenue, plans to hire more than 3,900 people this year as it expands internationally, including 350 pilots, 625 flight attendants and 1,500 ramp agents.
US Air, formed by a merger between the former US Air and America West airlines, said this week that it would recall about 400 flight attendants. The carrier previously said it would recall 55 pilots and hire about 200 reservations agents.
Prior to the 2005 merger, Chief Executive Doug Parker predicted that the combined airline would result in a total staff reduction of about 5,000 workers.
United Airlines, the No. 2 U.S. carrier that emerged from a three-year bankruptcy last month, had about 103,000 employees before the Sept. 11 attacks, but now employs about 57,000.
But increased flying, especially on international routes, has allowed the carrier to recall all its flight attendants who took voluntary furlough. United is hiring 2,100 flight attendants and plans to recall 300 pilots this year.
"We are increasing our capacity," UAL spokesman Jeff Green said. "We're going to have additional summer flying."
Despite the 19 percent cut in wages for first-year flight attendants, United received about 7,500 applications for 2,000 jobs within a day of posting the positions in November.
Other work groups have felt the financial bite as well. The pilots union at Northwest this month tentatively agreed to a wage and benefits concessions worth $358 million annually to the airline. Some ground workers at Northwest ratified a contract this month that cuts their wages by 11.5 percent.
STAYING LEAN
Northwest, the No. 5 U.S. carrier, shed 1,295 workers in the fourth quarter of 2005 as part of a 40 percent reduction in its work force since 2001. The carrier, which aims to cut labor costs by $1.4 billion, has not said how many employees it may need to furlough during its restructuring.
AMR Corp.'s (AMR.N: Quote, Profile, Research) American Airlines, the No. 1 U.S. carrier, cut staff by 24 percent since Sept. 11, 2001, but has brought some workers back, rehiring 1,300 flight attendants through November 2004.
One analyst said increased capacity at carriers may indeed spur more recalls and new hiring, but the market for airline jobs is basically stagnant.
"If you're looking to break into the industry, it's one I wouldn't recommend at any level," airline consultant Michael Boyd said. "Overall, this is not going to be a bonanza in hiring in the airline industry."
Sun Mar 19, 2006 12:41 PM ET
By Kyle Peterson
CHICAGO, March 19 (Reuters) - Employment prospects for airline workers are better now than at any time since the Sept. 11 attacks, but the slight uptick in demand may not create jobs for all out-of-work airline professionals or lift the industry's decimated wage structure.
FACT BOX
UAUA.O (UAL Corp)
Last: $39.20
Change: -0.07
Up/Down: -0.18%
AprJulOctJan
Quote
Full Chart
Company Profile
Analyst Research
Large carriers such as UAL Corp.'s (UAUA.O: Quote, Profile, Research) United Airlines, US Airways (LCC.N: Quote, Profile, Research) and Continental Airlines (CAL.N: Quote, Profile, Research) have been adding staff since last year as competition on some routes has subsided and cost cuts have narrowed losses.
Still, struggling carriers continue to slash labor costs. Bankrupt Delta Air Lines (DALRQ.PK: Quote, Profile, Research), for example, is laying off thousands as part of its restructuring. Experts say joblessness abounds and compensation is down significantly as airlines struggle to keep costs in check.
"We're in a hiring situation, not in a furlough situation, but I don't think that tells the whole story," said Sara Nelson Dela Cruz, spokeswoman for the Association of Flight Attendants (AFA), which represents flight attendants at United and some smaller carriers.
"It doesn't tell the story of the thousands of people who were laid off after September 11," she said. "And it doesn't tell the story of the thousands of people who had to leave because they could no longer afford to stay in this industry."
Dela Cruz said that first-year flight attendants at United make about $17,000 a year, down from $21,000 before the attacks.
Government data show that the number of workers at "major" airlines -- as classified by the Transportation Department -- fell 21.6 percent from 2000 to 2004. Airlines added about 2,800 jobs in 2005, the first increase in jobs since 2000.
The airline industry has been hammered in recent years by soaring fuel prices and low-fare competition, sending major carriers like Delta and Northwest Airlines (NWACQ.PK: Quote, Profile, Research) into bankruptcy. But even before that, jobs began to rapidly disappear after the Sept. 11, 2001, attacks.
HIRING AGAIN
Some airlines, which have managed to get their labor costs down in the last few years, find themselves on surer footing and are regrowing their work forces.
Continental spokesman Ned Walker said, "We've called back all of our employees and have been in an aggressive hiring mode to accommodate previously announced growth as well as attrition."
He said the airline, No. 4 in the United States in terms of revenue, plans to hire more than 3,900 people this year as it expands internationally, including 350 pilots, 625 flight attendants and 1,500 ramp agents.
US Air, formed by a merger between the former US Air and America West airlines, said this week that it would recall about 400 flight attendants. The carrier previously said it would recall 55 pilots and hire about 200 reservations agents.
Prior to the 2005 merger, Chief Executive Doug Parker predicted that the combined airline would result in a total staff reduction of about 5,000 workers.
United Airlines, the No. 2 U.S. carrier that emerged from a three-year bankruptcy last month, had about 103,000 employees before the Sept. 11 attacks, but now employs about 57,000.
But increased flying, especially on international routes, has allowed the carrier to recall all its flight attendants who took voluntary furlough. United is hiring 2,100 flight attendants and plans to recall 300 pilots this year.
"We are increasing our capacity," UAL spokesman Jeff Green said. "We're going to have additional summer flying."
Despite the 19 percent cut in wages for first-year flight attendants, United received about 7,500 applications for 2,000 jobs within a day of posting the positions in November.
Other work groups have felt the financial bite as well. The pilots union at Northwest this month tentatively agreed to a wage and benefits concessions worth $358 million annually to the airline. Some ground workers at Northwest ratified a contract this month that cuts their wages by 11.5 percent.
STAYING LEAN
Northwest, the No. 5 U.S. carrier, shed 1,295 workers in the fourth quarter of 2005 as part of a 40 percent reduction in its work force since 2001. The carrier, which aims to cut labor costs by $1.4 billion, has not said how many employees it may need to furlough during its restructuring.
AMR Corp.'s (AMR.N: Quote, Profile, Research) American Airlines, the No. 1 U.S. carrier, cut staff by 24 percent since Sept. 11, 2001, but has brought some workers back, rehiring 1,300 flight attendants through November 2004.
One analyst said increased capacity at carriers may indeed spur more recalls and new hiring, but the market for airline jobs is basically stagnant.
"If you're looking to break into the industry, it's one I wouldn't recommend at any level," airline consultant Michael Boyd said. "Overall, this is not going to be a bonanza in hiring in the airline industry."
