Airlines see largest employment drop in five years

Full-time employment at Frontier Airlines declined 15.7 percent between December 2007 and the same month on 2008, the steepest drop of 14 large and low-cost airlines, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported Wednesday.

The overall full-time employment decrease of seven low-cost airlines over that period, including Denver-based Frontier, was 3.3 percent, the BTS said in its monthly “Passenger Airline Employment Data.”

For seven larger, “network” airlines, the decrease was 6.3 percent.

Frontier had 4,397 full-time equivalent employees at the end of 2008, putting it in the middle of the seven low-cost carriers on the BTS list. Southwest Airlines (NSYE: LUV) was tops with 35,499 workers; Virgin America had the fewest, 1,259.

BTS counted two part-time employees as a single full-time worker.

Frontier is in Chapter 11 bankruptcy protection.

Virgin America had the greatest increase of employees — 71.3 percent — between December 2007 and December 2008 of the seven low-cost airlines, followed by Allegiant (14.2 percent). AirTran was the only low-cost airline besides Frontier with a loss of employees (9.1 percent).

Among seven “network” airlines, United saw the biggest employee reduction, 12.7 percent, between the two Decembers, BTS said, followed by Northwest Airlines (6.9 percent) and Delta Air Lines (6.2 percent). Northwest and Delta (NYSE: DAL) are combining operations.

Overall — among large, low-cost and smaller regional airlines — employment levels experienced their largest year-to-year decrease since December 2003, BTS said.

Employment levels dropped 6.7 percent in December 2008 compared to the same month in 2007, the sixth straight decline in full-time equivalent rates compared to the same month the previous year.

E-mail dayton@bizjournals.com. Call (937) 528-4400.

Layoffs Continue for Airlines in Crisis

By LISA STARK, MATT HOSFORD and KATE BARRETTJune 5, 2008
The nation's major airlines will stop flying more than 350 planes and lay off more than 4,000 employees by the end of 2009, reducing service to travelers around the United States this year and next, according to carriers' reports.

On Thursday, Continental Airlines became the latest carrier to announce cutbacks, saying it would retire 67 planes and lay off 3,000 workers to save money. More than half of those planes will stop flying by the end of 2008 and the rest of the aircraft will be retired in 2009. Reductions in staff will begin after the summer, though cutbacks in management and clerical staff will begin sooner, according to a notice sent this morning to employees.

"Continental today is announcing significant reductions in flying and staffing that are necessary for the company to further adjust to today's extremely high cost of fuel," the letter from Continental CEO Larry Kellner and president and Jeff Smisek stated today. "These actions are among many steps Continental is taking to respond to record-high fuel prices as the industry faces its worst crisis since 9/11."

In the past few months, all the nation's major airlines have decided not to fly as many planes or employ as many people as they'd like as fuel prices reach unprecedented levels.

Continental's news followed closely on the heels of Wednesday's announcement by United Airlines that detailed its own plans to retire 100 planes, lay off at least 1,400 workers and eliminate its low-cost Ted service.

About 80 of United's planes will be out of service by the end of the year and the other 20 will be retired in 2009. Removing those planes from service means United will slash domestic capacity over this year and next by 17 percent.

"They've chosen to take out airplanes rather than take out routes," said David Field, the U.S. editor of Airline Business Magazine. "What they're saying is 'we just cannot compete no matter what the route.'"

Carriers are making frugal business decisions because the ever-increasing price of fuel, now at $130 per barrel, has left them in a position many say they couldn't even imagine at the beginning of this year. According to the Air Transport Association, U.S. passenger and cargo airlines anticipate a $61.2 billion fuel bill this year, up from the $41.2 billion they paid for fuel last year.

It's been such a burden that eight airlines have gone out of business since Christmas, ATA said. For those still in business, fuel accounts for 30 percent to 50 percent of operating costs, according to David A. Castelveter, ATA's vice president of communications.

"With fuel at historically high levels, United and our competitors need to redefine ourselves in this marketplace," United CEO Glenn Tilton said this morning in a call to United employees. "The answers are not easy, yet this environment demands that we and the industry act decisively and responsibly."

The country's other major carriers have also announced cutbacks:
Delta is removing 15 to 20 mainline planes and 60 to 70 regional jets from service by the end of the year. Delta expects domestic capacity to be down 9 percent to 11 percent for the second half of 2008 compared with 2007.

Northwest will remove 15 to 20 aircraft from service -- two this month and the rest in the fall. In September, Northwest will reduce domestic system capacity by 5 percent versus its 2008 business plan, the carrier announced in April.

Continental Airlines plans to eliminate 3,000 jobs and remove 67 planes from service, the carrier announced on June 5, 2008

US Airways has announced it will get rid of six planes, a 2 percent to 4 percent reduction in capacity, in the second half of 2008. US Airways said that does not affect any employees.
American announced earlier this month that it plans to retire 40 to 45 mainline aircraft and 35 to 40 regional jets, reducing capacity by 11 percent to 12 percent.

Starting in September, American is discontinuing its Chicago to Buenos Aires, Argentina, service, eliminating its Boston to San Diego service, and scaling back its service from Chicago to Honolulu. In January of next year, the carrier will stop flying from Chicago to Honolulu altogether. This September, the carrier is also restructuring American and American Eagle flights out of San Juan, Puerto Rico, to the United States and various Caribbean destinations.

United and Continental both said this week that they are retiring older, less fuel-efficient planes. Continental will start cutting back in September. Continental will release details about how the cuts will impact specific flights and destinations by the end of next week, the carrier said Thursday.

Continental said the majority of employee cuts are expected to come through voluntary programs. Kellner and Smisek also announced today that they would decline their salaries for the rest of the year.

"The airline industry is in a crisis," Continental's Thursday letter stated. "Its business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace. We need to make changes in response."

Cuts are affecting travelers in cities of all sizes around the country. According to the Department of Transportation Statistics, scheduled commercial service has disappeared entirely this year from 37 small airports around the country.

And several aviation experts agree that there's more to come.

"Unless the fuel bubble implodes, and I don't think it will, we're going to see whole cities losing service," said Field, editor of Airline Business Magazine. "We're going to see, probably, another airline bankruptcy or two."

Meantime, Field said the slew of cutbacks is going to continue making things difficult for travelers.

"It means we're going to have to search a lot harder to find deals," he said. "There will be deals, but they're going to be harder to find. You're going have to spend more time on your computer."
"I think if there's any good news on the horizon, I think we'll see less delays in the future because we have fewer planes in the air," said aviation economist Darryl Jenkins. "All the planes will still be packed full of passengers."


ABC News' Randy Gyllenhaal contributed to this report.

June 2007 Passenger Airline: Employment Up 2.3 Percent from June 2006

Washington, DC – August 2007 – U.S. scheduled passenger airlines employed 2.3 percent more workers in June 2007 than in June 2006, the fifth consecutive increase in full-time equivalent employee (FTE) levels for the scheduled passenger carriers from the same month of the previous year, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported Tuesday (August 21). FTE calculations count two part-time employees as one full-time employee. (related tables are linked here)

BTS, a part of the Research and Innovative Technology Administration (RITA), reported that the network airlines, a group that includes most of the industry’s largest passenger carriers, reported more FTEs than the prior year for the second consecutive month after having reduced FTEs continuously since 9/11.

Adding FTEs from June 2006 to June 2007 were network carriers Continental Airlines, Alaska Airlines, Delta Air Lines and US Airways, all of the low-cost carriers except for ATA Airlines, and regional carriers American Eagle Airlines, SkyWest Airlines, ExpressJet Airlines, Horizon Air, Mesa Airlines, Pinnacle Airlines, Shuttle America, Republic Airlines and GoJet Airlines.
Scheduled passenger airlines include network, low-cost, regional and other airlines. Many regional carriers were not required to report employment numbers before 2003, so year-to-year comparisons involving regional carriers, or the total industry, are not available for the years before 2003.

The 413,500 FTEs employed by the industry in June was the most in any month since September 2005. The seven network carriers employed 268,600 FTEs in June, 65.0 percent of the passenger airline total, while low-cost carriers employed 17.7 percent and regional carriers employed 14.5 percent.

American Airlines employed the most FTEs in June among the network carriers, Southwest Airlines employed the most among low-cost carriers, and SkyWest employed the most among regional carriers. Six of the top 10 employers in the industry are network carriers.

Network Airlines

Network carrier FTEs increased 1.3 percent in June 2007 compared to June 2006, the second consecutive monthly gain from the same month of the previous year. Prior to the May increase, the network group had reduced FTEs from the previous year every month since August 2001.
Four network carriers increased FTEs from June 2006 to June 2007. They were: Delta up 8.3 percent, US Airways up 6.0 percent, Continental up 4.5 percent, and Alaska up 1.5 percent. The largest FTE decreases were reported by Northwest Airlines, down 4.4 percent and United Airlines, down 2.6 percent.

Collectively, the seven network carriers reduced their FTE headcount by 15.4 percent, or 48,900 FTEs, from June 2003 to June 2007. Network carrier FTEs dropped from 317,500 to 268,600 during the four-year period.

FTEs at six of the network carriers declined in June 2007 from June 2003. The exception was Continental with a 3.4 percent increase over June 2003. The biggest percentage decline was at Northwest, down 24.6 percent, a reduction of 9,500 FTEs, followed by US Airways at 22.7 percent. The other FTE decreases during that time were United, down 18.6 percent; Delta, down 16.3 percent; American, down 14.7 percent; and Alaska, down 6.1 percent.

Data for US Airways and America West Airlines, now in the process of merging operations, are separately reported – US Airways’ data are included in the network carriers’ category and America West’s in the low-cost carriers’ category. US Airways will begin reporting a single number for the merged companies later this year.

Low-Cost Airlines

Low-cost carrier FTEs rose 5.3 percent in June 2007 compared to June 2006, the ninth consecutive increase after 18 consecutive monthly decreases from the previous year and the third consecutive increase of more than 5 percent.

All the low-cost carriers had FTE increases from June 2006 to June 2007 except ATA, which reported a decline of 9.2 percent. AirTran Airways and Frontier Airlines reported increases of more than 10 percent. For the first time since it began reporting employment data in February 2000, JetBlue Airways did not report a year-over-year increase in its FTE headcount as the number remained unchanged.

Low-cost carrier FTEs were 70,600 in June 2003, 69,400 in June 2006 and 73,100 in June 2007. The rise from 2003 to 2007 was 3.5 percent. The 2003 to 2007 increase would be 10.1 percent if the 2003 employment data are excluded for Independence Air, which discontinued all flights on Jan. 5, 2006.

Employment data for Independence, which changed its business model from a regional to low-cost carrier in mid-2004, have been included with low-cost carriers for 2004 and 2005 for consistency.

Low-cost carriers are those that the industry recognizes as operating under a low-cost business model, with fewer infrastructure costs and greater expectations of productivity.

Regional Airlines

Regional carrier FTEs were up 5.1 percent in June 2007 compared to June 2006, the fifth consecutive month with an increase in FTEs of more than 5 percent from the same month of the previous year.

Sky West and Republic reported the largest increases in the group. Sky West, the regional carrier with the most FTEs, employed 23.2 percent more FTEs in June 2007 than June 2006, while Republic employed 82.0 percent more.

Regional carrier FTEs rose from 51,900 in June 2004 to 59,900 in June 2007, an increase of 15.3 percent.

The 10 regional carriers reporting employment data in both 2003 and 2007 employed 19.6 percent more FTEs in June 2007 than in June 2003. Of that group, SkyWest reported the biggest gain, 94.8 percent, followed by ExpressJet at 37.2 percent. Mesaba Airlines, Air Wisconsin, Atlantic Southeast Airlines and Executive Airlines reported fewer FTEs in June 2007 than June 2003.

Regional carriers typically provide service from small cities, using primarily regional jets to support the network carriers’ hub and spoke systems.

Reporting Notes
Airlines that operate at least one aircraft with the capacity to carry combined passengers, cargo and fuel of 18,000 pounds – the payload factor – must report monthly employment statistics.

The Other Carrier category generally reflects those airlines that operate within specific niche markets, such as Aloha Airlines and Hawaiian Airlines in serving the Hawaiian Islands.
Data are compiled from monthly reports filed with BTS by commercial air carriers as of Aug. 10.
Additional airline employment data can be found on the BTS website. BTS has scheduled release of July airline employment data for Sept. 18.

Airline workforce has first growth in six years

By Kelly Yamanouchi Denver Post Staff Writer
Article Last Updated: 07/17/2007 03:25:21 PM MDT

As United Airlines takes pilots' applications this week for the first time since 2001, federal data shows that total employment by large network airlines grew for the first time in nearly six years.

The data released by the U.S. Bureau of Transportation Statistics today showed that the seven network airlines - American, United, Delta, Continental, Northwest, US Airways and Alaska - had 0.3 percent more workers in May 2007 than a year earlier.

Though it's a small increase, it marks the first increase since August 2001, the month before the Sept. 11 terrorist attacks. The federal data on employment counts is based on the number of full-time equivalent employees.

For May, Continental, Alaska, Delta and US Airways grew their full-time equivalent employee count year-over-year, while Northwest, United and American reduced their count.

United's full-time equivalent employee count declined to about 51,800 in May, down from about 53,600 a year earlier. United has not yet brought new pilots on board, and while it adds employees in some areas, it has continued to seek ways to reduce costs.

Frontier Airlines' full-time equivalent employee count grew to about 4,900 from about 4,400 a year earlier.

Overall, U.S. airline employment - including network carriers as well as low-cost carriers and regional carriers - was up 2 percent in May than a year earlier.