"Many More Jobs Shed in Global Aviation"

Wednesday, September 26, 2001
 
Many More Jobs Shed in Global Aviation


CHICAGO/LONDON (Reuters) - The global aviation and aerospace industries
announced a whopping 21,800 more job cuts on Wednesday even as European
plane maker Airbus SAS (ARBU.UL) predicted a rapid rebound from the
industry's recent turmoil following the deadly Sept. 11 attacks in the
U.S. 

U.S. aviation job losses since the attacks in New York and near
Washington, when hijackers overtook four civilian planes, now total
122,800, including those announced by aerospace giant Boeing Co. (BA.N) 

Delta Air Lines Inc. (DAL.N), the third-largest U.S. carrier, said it
was cutting up to 13,000 jobs, or 16 percent of its global work force,
and its flight schedule by 15 percent. 

Delta's cutbacks were slightly less than those at other U.S airlines,
which have been generally 20 percent. 

The reductions continue to unfold worldwide, with Canada's leading
aerospace companies revealing their figures. 

Carrier Air Canada (AC.TO) and civil aircraft maker Bombardier Inc.
(BBDa.TO), both of Montreal, are cutting a total of 8,800 jobs. 

``I think it speaks to the overall magnitude of the (Sept. 11)
tragedy,'' Delta Chief Executive Leo Mullin said during a news
conference at Atlanta headquarters. ``We have to go back to the point
that this was an act of war committed on America using aviation as the
method of destruction.'' 

Despite the current trauma worldwide, Mullin predicted that Delta would
emerge even stronger in a year's time. 

Delta was the last of the top eight major U.S. airlines to announce
layoffs, with low-cost carrier Southwest Airlines Co. (LUV.N) of Dallas
still holding out. However, Southwest on Wednesday said it would take no
new aircraft into its fleet this year and would defer 11 orders for
Boeing 737-700 aircraft as passenger traffic remains light. The carrier
also said it was too early to tell whether the slowdown would affect the
27 deliveries the carrier has scheduled with Boeing for 2002. 

PLENTY OF OPEN SEATS 

In an important sign of how fearful the American public remains about
flying, Delta flights are still only about a third full. 

Mullin said the airline will ``absolutely'' be cutting fares to help get
people back in the air, a statement presaged by UAL Corp.'s (UAL.N)
United Airlines over the weekend. 

Shares of U.S. carriers closed mostly lower in New York Stock Exchange
trading, with Delta and Southwest rising slightly. 

European and Asian airline shares closed mostly higher, although some
aviation stocks reflected more pain from the higher costs and loss of
passengers. 

Swissair Group (SWSZn.VX) had to reassure investors that it was still
solvent after its chairman said he could not exclude the possibility of
bankruptcy for the company, which had been brought to its knees even
before the attacks by a disastrously unsuccessful expansion strategy. 

``The effects of the events of Sept. 11 came at the worst possible
moment for the company,'' Mario Corti said. 

Asked whether he could rule out bankruptcy, Corti said, ``I can't
exclude anything.'' 

JOB CUTS WORLDWIDE 

Job losses on Wednesday were also announced in Asia, which has been
spared the worst of the crisis in global aviation. 

South Korea's Asiana Airlines Co. Ltd. (20560.KQ) announced 360 job cuts
while United Airlines said 400 Asian-based flight attendants would be
cut. 

Austrian Airlines (AUAV.VI) said it would cut capacity by 10 percent and
remove four jets from service. It also plans to cut staff but declined
to give figures. 

Air Canada (AC.TO) said it would cut an additional 5,000 jobs, scale
back its flight schedule by 20 percent and eliminate 84 aircraft in
response to the attacks. 

Bombardier said slower aircraft production rates would result in the
elimination of 3,800 jobs. Bombardier makes both business and regional
jets. It said the cuts affect its main Montreal production work force as
well as employees in Toronto, the United States and Belfast, Northern
Ireland. 

AIRBUS SEES QUICK RECOVERY 

But Boeing's European rival Airbus predicted that the industry would
bounce back relatively quickly from its turmoil, just as it had
recovered from the Gulf War in the early 1990s and other crises. 

After the Gulf War, the sector ``came back almost as dramatically as it
went down -- a deep 'V' recovery,'' Chief Commercial Officer John Leahy
said, noting that the industry had notched up annual growth of about 6
percent for the rest of the decade. 

``There are always differences -- history never completely repeats
itself -- but I would submit that we are much closer to the scenario of
the Gulf War than we are to any massive structural change,'' he said in
Hong Kong. 

``Aviation is so integrated into the world economy and national
economies that unless you want to predict the Stone Age all over again
(or) total Depression (as in) the early 1930s, aviation must, and will,
rapidly recover,'' Leahy said. 

Earlier in the week, Boeing Chief Executive Phil Condit said he was not
yet sure how fast travel would pick up, although early signs were that
it was recovering faster from a deeper hole than that seen following the
Gulf War. 

SAFETY MEASURES 

Passengers and governments want to see measures taken to prevent
aircraft being taken over and used as weapons. 

The Bush administration and Congress considered stepped up aviation
security measures on Tuesday, including additional sky marshals on
domestic flights and stronger cockpit doors. 

Delta's Mullin said he and other airline executives greatly favor the
federal government taking over all aspects of security. After sitting
next to a plainclothes sky air marshal earlier in the week, Mullin said
he was very impressed. 

In Washington, President Bush continued discussions on aviation security
options, including stronger cockpit doors, a reduction in carry-on
baggage and tighter controls over airport screeners. 

A spokesman said Bush could announce some security steps on Thursday
when he meets with airline workers in Chicago, a trip partly designed to
boost confidence in the sagging commercial aviation industry. 

``Many Americans have already come to the conclusion it's safe to fly
and they've safely flown,'' White House spokesman Ari Fleischer said.
``Other Americans are going to approach this on their own time, at their
own pace, and the president understands that.''

Attached Photo:

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