Airline Finance News - North America

AirGuide Business, July 7, 2008

AirTran Airways

AirTran Airways was awarded a US General Services Administration flying contract covering 119 city-pairs worth an estimated $47 million during FY09, a more than 30% year-over-year increase. 7/4/2008

AirTran Airways

AirTran Airways to cut salaries and wages by about 10% due to soaring cost of fuel. The carrier warned that it may eventually need to make more cuts. "While we are starting with a conservative reduction," CEO Bob Fornaro said, "we may need to do more." 7/3/2008

AirTran Airways

AirTran Airways will impose a 15% pay cut on officers and a 5%-8% cut on most staff, according to a letter to employees from Chairman, President and CEO Bob Fornaro cited by The Atlanta Journal-Constitution. Approximately 48% of AirTran employees are unionized, the paper said, and the carrier will have to negotiate the reductions. It expects them to take effect next month and for overall wage expense to fall 10% over the next six months. AirTran announced its most recent capacity cut two weeks ago. 7/3/2008

AirTran Airways

The soaring cost of fuel is prompting AirTran Airways to cut salaries and wages by about 10%. The carrier warned that it may eventually need to make more cuts. "While we are starting with a conservative reduction," CEO Bob Fornaro said, "we may need to do more." 7/3/2008

Alaska Airlines

Alaska Airlines said it now is using diesel-powered preconditioned air units in conjunction with ground-based electricity in place of onboard APUs at 19 gates at its Seattle hub. The ground units burn approximately 10 times less fuel than APUs and are expected to conserve more than 1.1 million gal. per year, saving $2.6 million at current prices. The carrier expects to have 14 more units in place at Anchorage, Portland, Ore., and San Francisco later this year. It also said it completed the retrofit of all eligible 737s with blended winglets in early June. 7/1/2008

American Airlines

American Airlines flew 11.85 billion system RPMs in June, down 3.1% year-over-year, while capacity declined 1.2% to 13.86 billion ASMs. Load factor dropped 1.7 points to 85.5%. American Eagle flew 736.7 million RPMs, down 8.6%, against a 2.3% decline in capacity to 980.8 million ASMs. Load factor fell 5.2 points to 75.1%. 7/4/2008

American Airlines

American Airlines said it will cut almost 7,000 jobs and take a second-quarter charge of up to $1.2 billion on the value of its fleet. It will also book a $70 billion charge related to severance packages. Part of that charge may be taken in the third quarter. The airline on Wednesday notified junior flight attendants that they are subject to furlough on Aug. 31. 7/3/2008

American Airlines

American Airlines' parent AMR will reduce its employee headcount by about 8 percent as it cuts capacity to offset record-high fuel prices, the company said in an internal memo on Wednesday. In a letter from Jeff Brundage, AMR's senior vice president in charge of human resources, job cuts would be in line with the overall system capacity reductions, which are expected to total 8 percent. AMR, which currently has about 85,500 employees, has said it would reduce domestic capacity by 11 percent to 12 percent as part of the system-wide cuts.The airline industry, battered this year by record fuel prices, is cutting capacity and shrinking operations. Major airlines have announced job cuts that will total in the thousands. Earlier on Wednesday the airline said that up to 900 of its flight attendants, or 5 percent, would be subject to furlough. An AMR spokesman said the company has notified the Association of Professional Flight Attendants, the workers' union, that the furlough would be effective beginning August 31. The workers subject to involuntary furlough would be the carrier's most junior US-based flight attendants. AMR said in a statement it hopes to limit involuntary layoffs by offering a voluntary retirement option to many US-based and San Juan-based employees who are at least 50 years old with at least 15 years of service. 7/3/2008